Entain deliver sustainable, consistent and diversified growth

Investors

Entain plc (LON:ENT), the global sports-betting and gaming entertainment group, has reported trading for the period from 1 July to 30 September 2021.

Q3 Highlights

·      Strong Q3 performance with Group net gaming revenue (“NGR”) up 4% (+6% cc1) against a period of high growth in the prior year

o  Online NGR +10% cc1, marking a 23rd consecutive quarter of double-digit growth in constant currency

o  Excluding Germany, online NGR was up +18 %cc1

o  All major markets (excluding Germany) delivered a strong performance, particularly in Australia and Brazil

·      Retail NGR was +1%cc1, with UK volumes recovering toward pre-Covid-19 levels, and activity steadily rebuilding in Europe

·      BetMGM continues to deliver strong growth, with a 23%3 market share across the US in sports-betting and iGaming for the three months to August

o  26%3 share in sports-betting and iGaming in the markets in which BetMGM operates

o  Clear iGaming market leader with 32%3 market share

o  Industry data for month of August shows BetMGM challenging for #1 market position across sports-betting and iGaming

o  Live in 16 jurisdictions, with recent launches in Arizona, Wyoming and South Dakota on first day of state licencing

o  Successful start to the NFL season with the launch of a national advertising campaign featuring Jamie Foxx

·      Continued progress on ESG initiatives under our Sustainability Charter

o  ARC programme continues to make good progress, expanding trials into real time customer interaction across UK brands 

o  The Entain Foundation renewed its commitment to Pitching-In Trident Leagues and SportsAid partnerships

o  The Entain Foundation U.S. funded pioneering research with University of Nevada in Las Vegas (“UNLV”) and launched a new app to support the American Gaming Association’s (“AGA”) Responsible Gaming Initiative

·      FY2021 Group EBITDA5 expected to be in line with previous guidance of £850m – £900m

o  Uplift from strong Q3 trading performance offset by the previously announced impact of the licensing process in the Netherlands

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

“These results demonstrate Entain’s continuing ability to deliver sustainable, consistent and diversified growth.  Our powerful Entain platform provides customers with great products and experiences, which enables us to grow ahead of our markets as demonstrated by 23 consecutive quarters of double-digit online growth.

We continue to lead our industry in the all-important area of player protection, and I am excited by the early results of our innovative ARC programme, which we firmly believe has the potential to transform player protection across the industry.

As we announced on 12 August, our total addressable market is expected to more than triple to over $160bn.  This will be driven by the significant opportunity in the US, where we are now challenging for the number one market position, our growth plans in other new and existing markets, and our strategy of entering into new areas of interactive entertainment.

By offering customers ever more engaging products, while leveraging our scale and technology, we will drive the flywheel effects of secular growth dynamics that can triple the size of our business.  As a result, we remain very confident in Entain’s future prospects.”

Full Year EBITDA expectations

On 8 July 2021 Entain announced a first half trading update for the six-month period ending 30 June 2021. As part of that announcement, Entain made the following statement:

“FY21 EBITDA now expected to be in the range of £850m to £900m, ahead of current consensus”

On 12 August 2021 Entain announced its interims results for the six-month period ending 30 June 2021. As part of that announcement, Entain made the following statement:

“Following Entain’s strong first half performance, the Group is confident in its prospects for the second half of 2021 and, as previously guided, expects full year EBITDA to be in the range of £850m to £900m.”

The Forecast has been repeated in this third quarter trading update. The Forecast constitutes a profit forecast for the purposes of Rule 28.1 of the Takeover Code.

The Entain Directors confirm that the Forecast remains valid and confirm that the Forecast has been properly compiled on the basis of the assumptions stated below and that the basis of accounting used is consistent with Entain’s accounting policies.

Assumptions

The Forecast was prepared on the basis of the following assumptions applying for the remainder of the forecast financial year to 31 December 2021, any of which could turn out to be incorrect and therefore affect the validity of the Forecast:

Factors within the influence and control of the Entain Directors

·      There is no material change in the operational strategy of Entain from the date of this announcement to 31 December 2021.

·      There will be no material change to the Entain Executive Directors in the current financial year.

·      There will be no new acquisitions, partnerships or disposals which will have a material impact on Entain’s results 2021 EBITDA.

·      There will be no material change in the dividend or capital policies of Entain in the current financial year.

·      There are no material strategic investments over and above those currently planned.

·      Entain’s accounting policies will be consistently applied over the forecast period to 31 December 2021.

Factors outside the influence of the Entain Directors

·      There will be no material macroeconomic change in the principal markets and regions in which Entain operates.

·      There will be no material adverse events which will have a significant impact on Entain’s financial results or the financial position of Entain.

·      There will be no changes in interest rates, bases of taxation, regulatory environment or legislation that have a material impact on Entain, including in relation to operations or accounting policies.

·      There will be no material changes in customer demand or the competitive environment in which Entain operates.

·      There will be no business disruptions that materially affect Entain or its customer or supplier partners.

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