Entain: Strong 2021 performance demonstrating strength of our diversified growth model and global platform

Entain plc, the global sports betting, gaming and interactive entertainment Group, is pleased to announce its results for the year ended 31 December 2021. The strong performance reflects the capabilities and diversification provided by the Group’s industry leading platform in driving growth.

Operational Highlights:

• Strong growth across the Group with NGR up 7% (8%cc) in the year
  • Online NGR up 12% (13%cc) in 2021, the ninth consecutive year of double-digit online growth
  • Growth in actives of 25% in the year as we expand our appeal to a broader audience
  • Good performance in Retail as year end volumes returned to over 90% of pre-Covid levels
• BetMGM continues to go from strength to strength as a leader in the fast growing US market
  • Established as the number two operator for sports betting and iGaming with a 23% market share in the fourth quarter across the markets in which it operates
  • Market leader in iGaming with 29% market share in Q4 2021 in the markets in which it operates
  • Live in 21 markets, reaching over 37% of the U.S. adult population, with launches in Illinois and Ontario planned for the coming months
  • Upgraded expectations for net revenue from operations of over $1.3bn in 2022 and anticipates reaching positive EBITDA in 2023

• Continued execution of growth strategy into new markets
  • Completed acquisitions of Bet.pt in Portugal and Enlabs AB in the Baltics as well as UNIKRN to drive access to the esports skill based wagering market
  • Further growth secured since the start of the new financial year with three transactions, including the acquisition of Avid Gaming to drive growth across Canada
  • Launch of the Ennovate hub to explore use of innovative technologies, products and services to further enhance the customer experience
• Further progress under the Group’s Sustainability Charter delivering industry leading ESG
  • ARC^TM (“Advanced Responsibility & Care”) programme continues to progress well, with real-time customer interaction trials underway, along with initial stages of international rollout
  • A number of initiatives launched across the year, including a commitment to net zero carbon emissions by 2035, and EnTrain to benefit the lives of 1m people through access to technology
  • Named EGR Operator of the Year, as well as Socially Responsible Operator of the Year at the SBC Awards North America
  • Entain continues to be the only online-led gaming company included in the Dow Jones Sustainability Indices, in addition to its continued inclusion in the FTSE4Good index

Financial Highlights:

• Strong financial performance; Group Underlying EBITDA^1,4 up +5% at £881.7m at the upper end of guidance
  • Online Underlying EBITDA^1,4 up +12% at £899.0m reflecting the double digit growth in all key markets excluding Germany and the Netherlands (excluding Germany and the Netherlands online NGR was +21cc%)
  • Total Retail NGR -7%cc (-3%cc⁹) and Underlying EBITDA^1,4 of £66.9m was £31.4m behind the prior year
  • Total Group Revenue of £3,830.0m up +8% (+9%cc) in 2021
  • Including 50% share of BetMGM joint venture, Group FY21 NGR was up 14% (15% cc)
• BetMGM (the Group’s joint venture in the US) continues to perform strongly, with FY21 NGR of approximately $850m⁷, up nearly 5 times versus the prior year
• To repay £44m received under the Coronavirus Job Retention Scheme (“furlough scheme”) in FY21
• Group profit after tax¹ was £275.6m, up 142% compared to 2020
• Underlying free cashflow⁸, before the investment into BetMGM and acquisitions/disposals, of £537.3m
• Year end net debt of £2,086.4m with leverage at 2.4x ensuring balance sheet flexibility to support our growth strategy

Jette Nygaard-Andersen, CEO of Entain, commented:

“Our Full Year results demonstrate yet again that Entain is a business with growth built into its business model. Our strong performance is underpinned by the Entain platform which encompasses the compelling combination of our proprietary technology, our outstanding people around the world, and our industry-leading operational capabilities.  It is this unique platform that enables us to deliver an ever-improving customer experience, to embrace emerging consumer and technological trends, and to grow into new markets and product areas.

All of our major markets have performed well.  In particular, BetMGM in the US has delivered a five times increase in net gaming revenue versus the previous year, and is ready to challenge for the number one position across the markets in which it operates.  Elsewhere, our retail business has recovered strongly and volumes have now returned to 90% of pre-Covid levels as restrictions have eased and customers have returned to our shops.

As ever, I would like to thank each and every one of our colleagues for their dedication, hard work and professionalism in helping to achieve these results. Given the quality of our people, the ongoing broad-based growth of the business, its continuing momentum, and the investments that we are making in innovation to support our future expansion, we remain confident in our financial performance for FY22 and beyond.”

Dividend
The Board has not proposed a final dividend for FY2021.  Recognising the importance of dividends to shareholders alongside our capital allocation priorities in supporting the Group’s growth strategy, the Board continue to keep the recommencement of the payment of dividends under on-going review.

Outlook
The Group has delivered strong results in FY2021, reflecting both the diversified nature of our business model, the strength of our platform and the quality of our people.  As we start 2022 we see retail heading towards pre-Covid levels and online performing inline with expectations against tough prior year comparables.  As global economies steadily emerge from the impact of the pandemic, we continue to provide our customers with great products and experiences.  As a result, we remain confident in our financial performance for 2022 as well as our long-term prospects.

Notes

• 2021 and 2020 reported results are audited and relate to continuing operations
• Reported results are provided on a post IFRS 16 implementation basis
• Growth on a constant currency basis is calculated by translating both current and prior year performance at the 2021 exchange rates
• EBITDAR is defined as earnings before interest, tax, depreciation and amortisation, rent and associated costs, share based payments and share of JV income. EBITDA is defined as EBITDAR after charging rent and associated costs. Both EBITDAR and EBITDA are stated pre separately disclosed items
• Stated pre separately disclosed items
• Adjusted for the impact of separately disclosed items, foreign exchange movements on financial indebtedness and losses/gains on derivative financial instruments (see note 10 in the financial statements. EPS is also disclosed excluding BetMGM as this gives a better view of the EPS attributable to the Entain trading businesses)
• BetMGM revenues comprise of sports (Online and Retail) and iGaming revenues
• Underlying free cashflow is EBITDA less working capital, capital expenditure, finance lease, corporate taxes and before the investment in BetMGM and acquisitions/disposals
• Retail numbers are quoted on a LFL basis. During 2021 there was an average of 4,540 shops in the estate, compared to an average of 4,727 in the same period last year