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GVC Holdings PLC

GVC Holdings PLC Global scale and market diversification delivering very strong online growth

GVC Holdings PLC (LON: GVC), the global sports-betting and gaming Group, is pleased to announce its results for the year ended 31 December 2018.

Group

Reported1

Proforma2

Year ended 31 December

2018

2017

2018

2017

Change

Constant currency3

£m

£m

£m

£m

Net gaming revenue (NGR)

2,979.5

815.9

3,571.4

3,288.1

9%

9%

Revenue

2,935.2

789.9

3,523.6

3,247.6

8%

9%

Gross profit

2,004.2

575.3

2,404.4

2,256.3

7%

Underlying EBITDA4

640.8

211.3

755.3

666.5

13%

Underlying operating profit5

520.8

169.2

610.1

514.1

19%

Underlying profit before tax5

434.6

151.0

Loss after tax

(56.4)

(34.9)

Diluted EPS (p)

(12.2)

(11.6)

Continuing adjusted diluted EPS6 (p)

76.3

43.6

Total Dividend per share (p)

32.0

29.8

Financial highlights (proforma basis2)

· Proforma Group NGR up 9% at £3,571.4m

· Proforma Group revenue up 8% at £3,523.6m

· Proforma Group underlying EBITDA4 up 13% at £755.3m

· Proforma Group underlying operating profit5 up 19% at £610.1m

Financial highlights (reported basis1)

· Reported Group NGR up 265% at £2,979.5m

· Reported Group underlying EBITDA4 up 203% at £640.8m

· Reported Group loss after tax of £56.4m after charging £434.2m (£453.5m pre-tax) of separately disclosed items of which £322.5m relates to the non-cash amortisation of acquired intangibles

· Adjusted diluted EPS6 of 76.3p up 75%

· Second interim dividend of 16.0p per share taking the full year dividend to 32.0p, an increase of 7% y-o-y

· Adjusted net debt at 31 December 2018 of £1,896.6m (2.5x underlying proforma EBITDA)

Operational highlights (proforma basis2)

· Very strong growth in Online with market share gains in all key territories; NGR up 19% (+21% in constant currency (“cc”)3); Sports brands NGR +20% (+22% cc3) and Games brands NGR+16% (+16% cc3)

· UK Retail like-for-like7 NGR -3%; OTC trends in-line with expectations, Machines returned to growth in H2

· European Retail NGR +16% (+14% cc3) with growth in all territories

· Integration of the Ladbrokes Coral business progressing well; on track to deliver £130m cost synergies and £30m capex synergies. Playtech agreement gives greater flexibility

· US: Business well placed for growth; appointment of key roles

Current Trading2 (Period 1 January 2019 to 24 February 2019)

· Strong current trading. Group NGR +11% with Online NGR +22%.

Kenneth Alexander (CEO) said:

“The Group’s full year results reflect a very strong performance with proforma net gaming revenue 9% ahead of last year and proforma underlying EBITDA 13% ahead. 2018 was a transformational year for the Group with the completion of the Ladbrokes Coral acquisition in March making the Group the largest online-led sports-betting and gaming operator in the world. Excellent operational execution, effective marketing and a good World Cup helped both the legacy GVC and the acquired Ladbrokes Coral businesses perform ahead of expectations and materially ahead of the market, delivering market share gains in all our major territories.

The GVC operating model leverages the Group’s leading proprietary technology and product development capability, applying central marketing expertise alongside local operational execution. This model is proving highly effective. Combined with the benefit of being a truly global scale operator, together with the opportunities provided by the integration of Ladbrokes Coral and our joint-venture in the US with MGM Resorts, the Board is confident the Group is well-placed to absorb the impact of the Triennial Review and associated tax increases in 2019, and deliver strong EBITDA growth in future years.”