Entain plc (LON:ENT), the global sports betting and gaming group, has reported trading for the period from 1 July to 30 September 2024, as well as providing an update on strategic progress and expectations for FY24.
· Total Group Net Gaming Revenue (“NGR”): including 50% share of BetMGM1, up +8%, +10%cc2, and +7%cc2 on a proforma3 basis
· Improving Online NGR growth continues: Q3 Online NGR (excluding US) ahead of expectations, up +10%, +12%cc2, and +9%cc2 on proforma3 basis
o UK&I returned to YoY growth sooner than expected
o All key markets delivered growth in Q3
· Encouraging start to H2 for BetMGM: Q3 NGR c.+18%cc2 YoY and seeing market share stabilisation
· FY24 guidance upgraded: stronger than expected Q3 performance and increased confidence for the balance of the year
o Expect mid single-digit proforma3 constant currency growth in Online NGR (from low single digit4)
o Group EBITDA5 now expected to be towards the top of the £1,040m-£1,090m guidance range
Gavin Isaacs, CEO of Entain, commented:
“My first few weeks as CEO of Entain have reaffirmed my view that this is a very good business operating in a highly attractive global industry. Entain has great brands, an enviably diverse global portfolio and is bursting with talent, ambition and opportunities. Entain is already on a path of strategic and operational improvement, with the strong Q3 performance demonstrating the progress achieved so far. We are at the beginning of the journey and I’m looking forward to accelerating our progress, leading the business in our next growth chapter and capturing the many exciting opportunities ahead.”
Q3 trading highlights:
Group Q3 performance ahead of expectations, as operational execution continues to deliver improving organic revenue growth.
· Total Group NGR excluding 50% share of BetMGM1 up +8%cc2, and +6%cc2 on a proforma3 basis
· On a proforma3 basis, Online NGR (exc. US) was up +9%cc2 driven by volume growth and a YoY sports margin tailwind, whilst Retail NGR was down -1%cc2
· UK & Ireland NGR up +2%cc2 (Online +6%cc2, Retail -2%cc2)
o UK&I Online positive YoY growth reflects the lapping of prior year regulatory implementation as well as product, offering and customer journey enhancements
· International6 NGR up +9%cc2 on a proforma3 basis (Online +10%cc2, Retail flat cc2)
o Brazil (+48%cc2) continued to outperform expectations
· Entain CEE7 NGR up +11%cc2 (Online +13%cc2, Retail +2%cc2) on a proforma3 basis, with SuperSport in Croatia continuing to perform particularly strongly
· BetMGM1 Q3 NGR demonstrates continuing acceleration, up c.+18%cc2 versus prior year, reflecting our improved product and increased investment in player acquisition
o Market share stabilisation (15%8,9) with iGaming (22%) and Online Sports Betting (8%)
o BetMGM’s enhanced sports betting experience including Entain’s Angstrom capabilities across MLB, NBA, NFL & NCAAF driving increased parlay bet mix & Gross Gaming Revenue (GGR) hold
o Record iGaming revenues in Q3 with FTD’s up +70% and strong online sports to gaming cross-sell in NFL season to date
o Encouraging trends from single account single wallet integration in Nevada with strong FTD growth and player engagement continuing upon return to home state10
Strategic progress highlights:
Continued delivery against our strategic priorities of organic revenue growth, margin expansion and winning in the U.S, with operational focus on must-win markets, product enhancements and organisational efficiency.
· Gavin Isaacs joined Entain as Chief Executive Officer on 2 September 2024, and Stella David succeeded Barry Gibson as Chair on 30 September 2024
· The Board’s Capital Allocation Committee completed its review of strategic alternatives for Crystalbet, concluding not to pursue a sale. Crystalbet is Georgia’s leading sports betting and gaming brand with strong growth and cash generation. Third party interest did not exceed its value to Entain as an attractive part of our global portfolio
· Progress continues on our core product and technology roadmap: improving brilliant basics across our platforms, scaling our localisation capabilities and accelerating product delivery velocity in key markets to provide what matters most to our customers
o BetMGM’s sports betting experience now includes enhanced parlay and player prop offerings, powered by Angstrom’s differentiated market pricing capabilities, as well as new streamlined live betting and bet slip features
o BetMGM became the first sports betting app to offer Nevada bettors seamless, nationwide connectivity through a single, digital wallet, unlocking BetMGM’s unique omnichannel opportunity
Outlook:
As a result of a stronger than expected Q3 performance and increased confidence for the balance of the year, FY24 Online proforma3 NGR growth is now expected to be mid single-digit positive4, on a constant currency2 basis. As such, FY24 Group EBITDA is expected to be towards the top end of our £1,040m – £1,090m guidance range.
Q3 2024 Trading performance:
| Q3 2024: 1 July to 30 September 2024 | |||||||||
| TotalNGR | GamingNGR | SportsNGR | SportsWagers | SportsMargin | |||||
| Reported11 | CC2 | Proforma CC2,3 | Proforma CC2,3 | ||||||
| UK & Ireland | +2% | +2% | +2% | +3% | (1%) | 0% | +0.1pp | ||
| Online UK&I | +6% | +6% | +6% | +8% | 0% | 0% | +0.4pp | ||
| Retail UK&I | (2%) | (2%) | (2%) | (2%) | (2%) | 0% | (0.1pp) | ||
| International6 | +6% | +9% | +9% | +9% | +8% | +3% | +0.1pp | ||
| Online Int’l | +7% | +10% | +10% | +9% | +10% | +3% | +0.3pp | ||
| Retail Int’l | (1%) | 0% | 0% | +7% | (1%) | +6% | (1.2pp) | ||
| CEE7 | +53% | +54% | +11% | +19% | +8% | +10% | +0.2pp | ||
| Online CEE | +55% | +56% | +13% | +21% | +9% | +10% | +0.4pp | ||
| Retail CEE | +43% | +43% | +2% | +0% | +2% | +8% | (1.0pp) | ||
| Group (ex US) | +7% | +8% | +6% | +6% | +5% | +3% | +0.2pp | ||
| Online | +10% | +12% | +9% | +9% | +8% | +3% | +0.4pp | ||
| Retail | (0%) | 0% | (1%) | (2%) | (1%) | +2% | (0.5pp) | ||
| BetMGM1 | +17% | +18% | +18% | ||||||
| Total Group inc.50% of BetMGM1 | +8% | +10% | +7% | ||||||
Q3 YTD 2024 Trading performance:
| Q3 YTD 2024: 1 January to 30 September 2024 | |||||||||
| TotalNGR | GamingNGR | SportsNGR | SportsWagers | SportsMargin | |||||
| Reported11 | CC2 | Proforma CC2,3 | Proforma CC2,3 | ||||||
| UK & Ireland | (4%) | (4%) | (4%) | (3%) | (4%) | (7%) | +0.6pp | ||
| Online UK&I | (4%) | (4%) | (4%) | (3%) | (5%) | (12%) | +0.7pp | ||
| Retail UK&I | (4%) | (4%) | (4%) | (4%) | (3%) | (2%) | 0.0pp | ||
| International6 | +7% | +10% | +4% | +6% | +3% | +1% | (0.2pp) | ||
| Online Int’l | +7% | +10% | +6% | +5% | +4% | +1% | (0.1pp) | ||
| Retail Int’l | +3% | +6% | (3%) | +10% | (4%) | +3% | (1.3pp) | ||
| CEE7 | +96% | +100% | +12% | +23% | +8% | +11% | (0.2pp) | ||
| Online CEE | +99% | +103% | +13% | +25% | +9% | +12% | +0.1pp | ||
| Retail CEE | +82% | +86% | +6% | +7% | +6% | +7% | (0.4pp) | ||
| Group (ex US) | +6% | +8% | +1% | +1% | +1% | 0% | +0.1pp | ||
| Online | +9% | +12% | +4% | +3% | +4% | 0% | +0.2pp | ||
| Retail | 0% | +1% | (3%) | (3%) | (3%) | 0% | (0.4pp) | ||
| BetMGM1 | +7% | +10% | +10% | ||||||
| Total Group inc.50% of BetMGM1 | +7% | +8% | +2% | ||||||
Notes
(1) BetMGM revenues comprise of Sports (Online and Retail) and iGaming revenues
(2) Growth on a constant currency basis is calculated by translating both current and prior year performance at the 2024 exchange rates
(3) Proforma references include all 2023 acquisitions as if they had been part of the Group since 1 January 2023
(4) Guidance at Interim Results (8 August 2024) upgraded to FY24 Online NGR proforma constant currency growth of low single-digit positive, from previously low single-digit negative as provided at Full Year 2023 Results (7 March 2024)
(5) EBITDA is defined as earnings before interest, tax, depreciation and amortisation, share based payments and share of JV income. EBITDA is stated pre-separately disclosed items
(6) International segment comprises of all other countries outside the UK & Ireland, Entain CEE and US reporting segments, including Australia, Italy, Brazil, Netherlands, Georgia, New Zealand and Germany
(7) Entain Central and Eastern Europe segment (Entain CEE) comprises of Croatia and Poland
(8) Combined market share for North America by GGR for last three months ending August 2024 (includes US markets where BetMGM was active and an estimation for Ontario); internal estimates used where operator-specific results are unavailable
(9) Increase from 13% reported in H1 results (8 August 2024) reflects seasonality, with a higher iGaming weighting during the quieter sports calendar months
(10) References states where BetMGM operates licenced Online Sports Betting and/or iGaming
(11) 2024 results are unaudited, with the tables presented relating to continuing operations and including both statutory and non-statutory measures
Q3 Conference Call & Audio Webcast
An analyst call will be held today, Thursday 17 October 2024 at 9:00am BST. Participants may join via webcast or by conference call dial in, approximately 10 minutes before the start of the call.
Live webcast link: Entain Group 2024 Q3 Trading Update
To participate in the Q&A, please use dial ins below and register via the following link: Register for Q&A
UK +44 20 3936 2999
US +1 646 787 9445
Access Code: 537826
A replay and transcript will be available on our website: Results Centre – Entain Group
