Entain announces strong group-wide first half performance

Entain has reported its Interim Results for the six-month period ending 30 June 2021 (H1).

Financial highlights

• Strong performance across H1, reflecting the Group’s robust and diversified business model
• Total Group net gaming revenue (“NGR”) growth of 11% (+11%cc¹)
• Online NGR up 28% (+27%cc¹), driven by strong underlying performances in all key markets, a full sporting calendar and longer lockdown restrictions in retail
  • 22nd consecutive quarter of double-digit Online growth
  • Online NGR was up 38%cc¹ excluding Germany where the new regulatory regime is impacting the market
  • Retail NGR down 46% (-46% cc¹) reflecting estate closures through much of the period offset by encouraging early trends as shops re-open
• BetMGM (the Group’s joint venture in the US with MGM Resorts) continues to perform strongly and is well positioned for further success in H2
  • H1 NGR of $357m
  • Number two operator for sports-betting and iGaming across the US with 22%^2,3 market share
  • Number one operator in iGaming, extending leadership with 30%^,3 market share
  • As announced on 21 April, total combined investment in BetMGM by joint venture partners expected to be $660m by the end of 2021
• Group EBITDA^6,7 up 12% at £401m
• Group profit after tax for continuing operations £91m, up £69m
• Full year Group EBITDA^6,7,9, upgraded on 8 July 2021, expected to be in the range of £850m to £900m
• Net Debt of £1,951m at 30 June 2021, with net debt to EBITDA ratio of 2.2x following an active M&A programme and increased investment in BetMGM
• Successful renewal of a five year £590m Revolving Credit Facility (“RCF”) and a new $1,125m First Lien Term Loan B refinancing
  • Reinforces balance sheet strength at favourable terms and a more balanced maturity profile
  • Increased liquidity for corporate activity and investment

Operational highlights

• New efficiency programme launched to reduce costs and support investment in innovation and growth:
  • Investment in innovation of c.£100m over three years
  • Cost-savings totalling £100m expected in FY23
  • Net cash benefit of £75m per annum from FY23 onwards
• Acquisitions of Enlabs in the Baltics and Bet.pt in Portugal completed
• Ongoing commitment to ESG with further advances made across our Sustainability Charter

• • Encouraging live trials of Entain’s industry leading Advanced Responsibility and Care player protection programme, ARC
  • Commitment to be carbon net zero by 2035 based on Science Based Targets
  • ESG rating upgraded to AA by MSCI rating agency
  • Entain Foundation supported grass roots sports and young athletes through Pitching-In and SportsAid

Jette Nygaard-Andersen, Entain’s CEO, commented: “Entain’s platform continues to deliver. The quality and diversification of our businesses has enabled us to deliver our 22^nd consecutive quarter of double-digit online growth, while also making excellent progress on our strategic priorities.  This performance is not only a result of our industry leading technology, but also the hard work and dedication of our talented teams of people around the world, and I would like to take this opportunity to thank them.

“In the US, BetMGM goes from strength to strength with our position as number 2 operator firmly established in the fast-growing sports-betting and iGaming market. We expect to be operational in around 20 states, representing 33% of the US adult population, over the next 12 months.

“Entain has a long runway for sustainable growth built into our core business.  In addition, our unique powerful platform puts us at the heart of the convergence of media, entertainment and gaming, providing us with exciting opportunities in interactive entertainment that we believe will further power our growth for many years to come.”

Notes

(1)     Growth on a constant currency basis is calculated by translating both 2021 and 2020 performance at the 2021 exchange rates

(2)     BetMGM revenues comprise of sports (Online and Retail) and iGaming revenues

(3)     BetMGM market shares for the three month period to end of June 2021

(4)     2021 reported numbers are unaudited

(5)     Reported results are provided on a post IFRS 16 implementation basis

(6)     EBITDAR is defined as earnings before interest, tax, depreciation and amortisation, rent and associated costs, share based payments and share of JV income.  EBITDA is defined as EBITDAR after charging rent and associated costs.

(7)     Stated pre separately disclosed items

(8)     Adjusted for the impact of separately disclosed items, foreign exchange movements on financial indebtedness and losses/gains on derivative financial instruments (see note 8 in the interim financial statements)

(9)     References to profit expectations are made on a reported basis post IFRS16 implementation