Entain continue to deliver a strong trading performance

Entain plc

Entain plc (LON:ENT), the global sports betting, gaming and interactive entertainment group, has reported trading for the period from 1 July to 30 September 2022 (“Q3”).

Q3 Highlights

·      Group net gaming revenue (“NGR”) up +2% (flat cc1)

·      Online NGR +1% (-2% cc1) broadly in line with expectations and demonstrating positive underlying momentum

o  NGR +4% (+1% cc1), excluding Netherlands (where there is a temporary enforced closure of operations due to licencing procedures)

o  Record level of active customers in Q3, +6% YoY

o  NGR 3-year CAGR of 11% cc1

·     Retail NGR2 up 10% (+10% cc1) and continuing to deliver strong trading performance, with Q3 NGR2 +8% vs pre-Covid levels

·     BetCity (Netherlands) and SuperSport (Croatia) transactions along with creation of Entain CEE expected to complete in Q4, supporting further growth and geographic diversity

·     BetMGM continues to perform strongly with 25%3,4 market share where it operates (excluding New York and 23%3,4 including New York)

o  Successful start to the NFL season with Q3 NGR of just over $400m3, up c.90% YoY, with same-state revenues up c.50% YoY

o   Continued leadership in iGaming with 31%4 market share

o   Online sports-betting market share progressing well with particular strength (25%5 share) in states where we were live on day one of market launch

o   On track for FY22 NGR of over $1.3bn

o  Continued strong financial performance reiterates our confidence in reaching sustainable positive EBITDA during 20236

·      Continued leadership and progress delivered across our Sustainability Charter

o   Awarded SBC’s Global Socially Responsible Operator of Year for 2022

o  Entain and BetMGM led US online operators’ commitment to the first industry-led responsibility gaming standards

o   2022 Entain Sustain event to be held 19 October

Full Year Outlook

·      Healthy momentum into the year end with Online expected to grow year on year in Q4 benefitting from:

o   Easing of prior year comparators

– Last material Covid related lockdowns annualise during October

– Temporary enforced closure of Netherlands operations annualises from 1 October; expect to be licensed and operating by the end of 2022

o   World Cup in Q4 this year, whilst Euros tournament took place in Q2 and Q3 2021

·    FY2022 Group EBITDA7 expected to be in line with previous guidance of £925m – £975m, representing growth of 5-10% vs the prior year

Q3: 1 July to 30 September 2022

TotalNGRTotalNGR cc13yr CAGR Total NGR cc1 Sport WagersSport Wagers cc1Sports Margin
 
Online
   Sports1%(4%)12%1%(3%)+0.1pp
   Gaming1%(2%)9%
Total Online1%(2%)11% 
Retail210%10%3% 4%4%+1.3pp
Total Group2%Flat7%   

YTD: 1 January to 30 September 2022

TotalNGRTotalNGR cc13yr CAGR Total NGR cc1 Sport WagersSport Wagers cc1Sports Margin
 
Online
   Sports(4%)(5%)15%(1%)(3%)-0.1pp
   Gaming(6%)(7%)10%
Total Online(5%)(6%)12% 
Retail2102%103%1% 104%104%+0.6pp
Total Group12%11%6%   

Notes

(1)      Growth on a constant currency basis calculated by translating 2022 and 2021 performances at 2022 exchange rates

(2)      Retail operates in UK, Italy, Belgium, and Republic of Ireland.  Retail numbers are quoted on a LFL basis. During Q3 2022, there were an average of 4,274 shops/outlets in the estate, compared to an average of 4,513 during Q3 2021

(3)      BetMGM revenues comprise of sports betting (Online and Retail) and iGaming revenues

(4)      Three month period to Aug 2022, in markets in which BetMGM operates, and excluding August for AZ, IL and SD as data yet to be reported

(5)     Three month period to Aug 2022, in markets in which BetMGM was live on first day of state launch; CO, TN, MI, VA, WY, AZ, LA and excluding August for AZ as data yet to be reported

(6)     Based on current assumption of future live markets

(7)      Guidance on EBITDA is on a post IFRS 16 basis, as stated at Interim results on 11 August 2022

Jette Nygaard-Andersen, Entain’s CEO, commented:

“Our business continues to perform well with good underlying momentum across the group, including in BetMGM. This illustrates the effectiveness of our growth strategy, the unique capabilities of the Entain platform, and the underlying strength of our diversified global business. 

I am delighted that we have welcomed even more customers to our brands across the world. This is a testament to our relentless focus on the customer, as well as the quality of our products, content and talented people.

In the US, BetMGM continues to be the clear leader in the iGaming market, and the successful start to the NFL season also highlights the strength of our growing US sports betting offer.  

We have healthy momentum across the business and look forward to a strong finish to the year which includes the World Cup.  Looking ahead, we remain vigilant of the economic backdrop. However, our diversified revenue base and robust business model enable us to remain confident in our ability to deliver on our growth and sustainability strategy.”

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