# GVC Holdings to be renamed Entain plc in plans for future growth

- Link: https://www.directorstalkinterviews.com/gvc-holdings-to-be-renamed-entain-plc-in-plans-for-future-growth/412936627
- Published: 2020-11-12T07:49:14+00:00
- Author: Amilia Stone

**GVC Holdings plc **(LON:GVC), the global sports-betting and gaming group, is holding
a presentation for investors and analysts to outline its ambitious plans for the
future under its two core strategic pillars of [sustainability](https://www.directorstalkinterviews.com/sustainability-green-stocks-news)
and growth. These plans will be driven by the Group’s leading proprietary technology
platform and supported by a range of strategic initiatives, a number of which are
being launched today.

**KEY HIGHLIGHTS**

·    GVC Holdings to be renamed [Entain plc](https://www.directorstalkinterviews.com/ftse-company/entain-plc/ent.l)
to reflect the Group’s ambition to be the world-leader in sports betting and gaming
entertainment

·    A commitment that, by the end of 2023, 100% of the Group’s revenue will come
from markets that are nationally regulated.  In addition, by the end of 2020, 99%
will come from regulated and regulating markets

·     Launching the Advanced Responsibility & Care (“ARC”) programme, which uses
proprietary technology to further enhance player protection through additional checks
as well as improved monitoring and interventions

·      Responsible gambling metrics to be incorporated into remuneration across 
the Group

·      Launching the Entain Foundation to provide further support to the communities
in which we operate

·     Opportunities for significant growth in four key areas: the US market; our
core markets; entering into new markets; and expanding to new audiences

·      A strong current trading performance, reflecting the continued growth within
our core business

> **Shay Segev, GVC’s CEO, commented:**
> “Today marks an exciting new chapter for the Group, and an important step forward
> in achieving our ambition of being the world leader in sports betting and gaming.
> Under our new corporate identity, we will continue to use our unique technology
> platform to build on the exceptionally strong momentum that we have in our existing
> markets, grow into new markets, reach new audiences, enhance the customer experience,
> and provide industry-leading levels of player protection.
> We are absolutely committed to pursuing the highest standards of corporate governance,
> to providing outstanding career development opportunities for our colleagues, 
> and to supporting the communities in which we operate.  Our clear strategy of 
> prioritising sustainability and growth will allow us to achieve these goals, thereby
> providing long-term value for all of our stakeholders.”

**LEADING THE TECHNOLOGICIAL REVOLUTION OF OUR INDUSTRY**

Over the past decade, GVC has been at the forefront of revolutionising the gambling
sector through technology.  There are now products, platforms and ways of playing
that would have been unimaginable when GVC was first incorporated in 2004.  The 
pace of change shows no sign of abating, and new trends are emerging in betting 
and gaming entertainment that are continually opening up new audiences, markets 
and opportunities that we are uniquely positioned to explore.  We will continue 
to revolutionise gambling to create the most exciting and trusted entertainment 
for every customer.

GVC is, at its heart, a technology-enabled entertainment business.  We own 100% 
of our technology, which has been the key driver behind our success in: entering
new markets; expanding our organic opportunities; growing our range of products 
and services; adapting to regulatory changes; protecting our customers; enhancing
the customer experience; integrating acquisitions; and growing ahead of the competition.

**A FRESH CORPORATE IDENTITY: Entain plc**

To reflect the fundamental changes that have taken place both within our business
and in the wider industry, we are today announcing a fresh corporate identity.  
Subject to shareholder approval, GVC Holdings will become Entain plc (“Entain”).
This new identity will represent a new chapter for the Group under a re-energised
management team, and reflects our ambition to be the world leader in sports betting
and gaming entertainment.

**A CLEAR STRATEGIC FOCUS: SUSTAINABILITY AND GROWTH**

In order to achieve this ambition and deliver long-term value for all of our key
stakeholders, we have a clear strategy across two broad pillars: sustainability 
and growth.

**Sustainability: a new charter to ensure our long-term success**

We have long held the view that the most sustainable business in our industry will
be the most successful business in our industry, and with that in mind we are today
launching a new Sustainability Charter that is based around five cornerstones:

·      **An exclusive focus on regulated markets**:

Today, 96% of our revenue comes from markets that are nationally regulated or regulating.
By the end of 2023, 100% of our revenues will be from regulated markets, which means
that we are exiting markets in which there are currently no viable paths to regulation.
By the end of 2020, 99% of our revenue will be from nationally regulated or regulating
markets, and we will work closely with regulatory authorities in the remaining 1%
towards the highest regulatory standards.  If it becomes apparent that regulation
in those markets is unlikely, we will exit them.

·      **Continuing to take the lead on responsible gambling**:

Ensuring the highest possible levels of player safety and protection is the best
way of guaranteeing our long-term success.  Our technology enables us to continuously
upgrade and personalise our protections for customers.  As such we are today launching
our Advanced Responsibility & Care (“ARC”) programme.  We will proactively implement
a number of additional checks on customers at various thresholds in the customer
journey.

·      **Embedding Responsible Gambling into remuneration:**

From 2021 a responsible gambling metric is being incorporated into our annual group
wide bonus conditions.

·      **Pursuing the highest standards of corporate governance**:

We recognise that to be a world-leading company we need to adhere to the highest
standards of governance in all areas of our operations.  Our board has been strengthened
and revitalised over the last two years, notably with Barry Gibson becoming Chairman
in February 2020.  We now have a robust corporate governance structure and policies
in place that befit our status as a [FTSE 100](https://www.directorstalkinterviews.com/news/ftse-100)
company.  As the board and nominations committee is focused on bringing greater 
diversity to the organisation, it is anticipated that further changes will be made
to the board’s membership in due course.

·      **Investing in our people and local communities**:

We have a long history of recruiting, retaining and nurturing the best people in
our industry as well as a commitment to diversity, looking after our people, and
creating the best place to work.

We are also proud to be able to contribute to the wider communities in which we 
operate, and we are today launching the Entain Foundation, which is committed to
donating £100 million over the next five years including our new Pitching In programme
that supports grass roots sports and sports people.

These new actions and initiatives are unquestionably the right thing to do for the
long-term, but in the short-term they will inevitably come at a cost.  The actions
outlined above will reduce EBITDA in 2021 by some £40 million but this is offset
by strong underlying growth in our business, as set out below.

**Growth: four key drivers**

We have a range of exciting growth opportunities that can significantly increase
the scale of the Group over the next three to five years.  These opportunities are
based on four strategic imperatives:

1.   **Leadership in the US:** we have a clear ambition to be the leading operator
in the US through BetMGM, our joint venture with MGM Resorts.  We have strong momentum
already with an estimated market share of 18% across the states in which BetMGM 
is active.

2.   **Grow our core markets:** we have achieved a huge amount in our existing markets,
but there is still substantial headroom for further growth.

3.   **Enter new markets:** we see significant opportunities for expansion into 
new regulated markets through organic opportunities as well as M&A.

4.   **Expand to new audiences:** new technology-enabled forms of entertainment 
are constantly emerging, and we intend to be at the forefront of capturing them.
For instance, eSports and digital gaming are becoming the hub for a rapidly growing
audience out of which are evolving new betting markets, and we see significant potential
for us in this area. 

**CURRENT TRADING**

On 8 October we reported our 19^(th) consecutive quarter of double digit online 
NGR growth.  We have continued to see strong trading since then as a result of the
continuation of an active sporting calendar and strong gaming performances in all
our major territories as well as favourable sporting results benefitting margins.

This will result in an overall benefit to EBITDA this year of approximately £30 
to £40 million, which largely offsets the £37 million impact from the current enforced
store closures, as announced on 2 November.  Our guidance for EBITDA for FY2020 
therefore remains in the range of £770 million to £790 million.

This strong performance will add approximately £50 million to the Board’s expectations
for Online EBITDA for 2021.

**SUMMARY OF FINANCIAL IMPACTS**

As a result of this announcement and that of 2 November 2020, there are a number
of moving elements to EBITDA for 2020 and 2021.  For clarity these are set out as
follows:

|   | **EBITDA – 2020** | **EBITDA – 2021** | 
| **GVC guidance provided with Q3 results on 8 October 2020 ** | £770m – £790m | N/A | 
| **Impact of current enforced store closures as disclosed by GVC on 2 November 2020**^(1)  | £(37)m | No store closures currently enforced | 
| **Impact from implementation of the Sustainability Charter as announced today(market exits and player protection enhancements) ** | Nil | £(40)m | 
| **Current online trading benefit ** | £30m -£40m | £50m |

**Notes**

_1.     On 2 November GVC Holdings announced that the impact to EBITDA in FY2020
from the currently enforced restrictions across UK and European Retail would be 
approximately £37million.  The impact on EBITDA were all stores to be closed for
a whole month would be approximately £43 million._

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