TIDMFLTR
RNS Number : 7349F
Flutter Entertainment PLC
09 November 2022
9 November 2022
Q3 2022 Trading Update
Strong Group revenue and AMP growth ,
2022 US guidance upgraded and maintained for Group ex-US
Flutter Entertainment plc (the "Group") announces a trading
update for three months ended 30 September 2022.
Unaudited GBPm Q3 2022 Q3 2021 YoY %
YoY % CC(1)
Average monthly players(2)
('000s) 9,596 7,811 +23%
Sports revenue 1,143 906 +26% +17%
Gaming revenue 748 534 +40% +30%
------- ------- ----- ------
Total revenue 1,891 1,439 +31% +22%
All commentary within this trading update refers to constant
currency (1) growth rates. Pro forma references include Tombola and
Sisal for a full 3-month period in both 2021 and 2022. Any
differences due to rounding.
-- Group: Reported revenue growth benefitting from US growth of
82% and the Sisal acquisition. Pro forma revenue +11% and AMPs
+11%
-- US: Number 1 online sportsbook with 42%(3) market share;
strong start to NFL season and continued momentum underpinning
confidence in positive EBITDA for 2023
-- Group ex-US: Revenue +6% with AMPs +19%. Pro forma revenue 6%
lower with AMPs +6%. Strong growth in "consolidate and invest"
International markets partially offset guided regulatory changes
and challenging calendar/Covid comparatives in UK&I and
Australia(4)
-- Sustainability: Continued Positive Impact Plan progress
including a number of Play Well strategy events and the highest
level of accreditation with GamCare in the UK&I for our
proactive customer protections
-- Events: US investor day 16 November showcasing FanDuel's success, register here to attend
-- Full year guidance:
- US: Revenue guidance upgraded to $2.95bn - $3.2bn (GBP2.45bn - GBP2.65bn); previous guidance $2.85bn-$3.1bn (GBP2.3bn - GBP2.5bn). Adjusted EBITDA loss still expected to be in line with previous guidance of $300m - $360m despite earlier launch of Maryland. (GBP235m - GBP285m adjusting for foreign exchange movements)
- Group ex-US: Adjusted EBITDA for 2022 expected to remain
within the previously guided range and in line with expectations
(GBP1.29bn - GBP1.39bn), despite continued Irish Retail weakness
and UK fixture cancellations
- Guidance reflects current consumer trends with no discernible sign of slowdown year to date
- Interest: Expected weighted average cost of debt of 4.1% in Q4
increasing to 5.6% in 2023 and would give rise to c. GBP280m in net
cash interest cost in 2023
Peter Jackson, Chief Executive, commented:
"Flutter delivered a strong Q3 performance with pro forma growth
of 11% in both revenue and average monthly players. Our US division
is now our largest and generated $700m in revenue, up 82%. Good
growth in our 'consolidate and invest' International markets and
the acquisition of Sisal in August helped drive ex-US revenues.
We are really pleased with our performance in our US division
since the start of the NFL in September where we are now averaging
over 1m players on a regular NFL Sunday. In addition, we are seeing
an increase in customer retention rates as our parlay products
continue to grow in popularity, boosted by the start of the NBA
season. The ongoing momentum in our US division has led to an
upgrade to our outlook for the year, underpinning our confidence
that we will be profitable for 2023.
Outside of the US, we welcomed Sisal, Italy's leading gaming
operator, to our International division during the quarter and look
forward to working with the team to grow the business in Italy and
in other International markets.
We were delighted with the successful outcome of our arbitration
process with FOX regarding the price of their option to acquire
18.6% of FanDuel. This vindicates our position on the matter, with
FanDuel valued at $20bn based on its fair market value at 3
December 2020 and provides important clarity on the significant
cost required to buy into the number one US gaming business.
As we look ahead our product and geographic diversification, as
well as our recreational customer base, position us well for future
growth."
Divisional analysis
Total Sports(5) Gaming Average monthly
players(2)
Q3 2022 Q3 2021 YoY YoY YoY YoY Q3 2022 YoY%
Unaudited revenue % % % % (000s)
GBPm CC CC CC
--------- ------ ----------
US 598 280 +114% +82% +106% +36% 1,860 +42%
UK & Ireland 509 491 +4% +3% -10% +25% 3,459 +13%
- UK & Ireland
Online 443 423 +5% +4% -11% +29% 3,459 +13%
- UK & Ireland
Retail 66 68 -2% -3% -3% -2%
Australia 319 370 -14% -21% -21% 1,100 +1%
International 466 299 +56% +43% +99% +32% 3,176 +35%
------- ------- ----- ---- --------- ------ ----------
Group ex-US 1,293 1,160 +11% +6% -8% +29% 7,735 +19%
Group 1,891 1,439 +31% +22% +17% +30% 9,596 +23%
------------------ ------- ------- ----- ---- --------- ------ ----------
Tombola, acquired in January 2022 and Sisal, acquired in August
2022 have been included on a reported basis within UK & Ireland
Online and International respectively. The pro forma references
within the commentary below include Tombola and Sisal for a full
3-month period in both 2021 and 2022.
US
FanDuel remains the Number 1 sportsbook operator with 42% share
of the online market in Q3 and we maintained our podium position in
iGaming with a 19%(3) market share.
Revenue grew by 82% to GBP598m ($700m) during the quarter.
Sports revenue was 106% ahead and sportsbook revenue grew 150%
driven by strong customer acquisition across existing states as the
NFL season began, as well as the addition of six new sportsbook
states since the start of Q3 2021 . Customer economics remained
compelling, despite the anticipated step up in competition at the
start of the NFL season. We continued to apply a disciplined
approach to investment with expected payback periods in September
remaining within 18 months. Stakes were 82% higher at GBP4.5bn
($5.3bn) with record net revenue margin of 8.5% reflecting a
material increase versus the prior year. This was primarily driven
by structural improvements due to the growing popularity of our
market leading sports betting products such as SGP Live which
launched in September, and bookmaker friendly sports results which
we reinvested in promotional generosity for our customers.
iGaming growth of 36% was driven by a 40% increase in iGaming
AMPs. We continued to progress against our product roadmap,
launching new content including the roll out of the FanDuel Casino
daily reward machine.
UK & Ireland
Online
UK&I online AMPs grew by 13% with revenue 4% higher. Pro
forma AMPs were in line, with revenue 4% lower.
Sports revenue was 11% lower but in line with the prior year
excluding the benefit of the European Championships in 2021. Aided
by the launch of our 'Bet Builder' products, which are driving
structural margin improvements, sportsbook net revenue margin
increased 50 basis points to 10.3%. The start of the new football
season has been impacted by a slower mid-summer start and fixture
cancellations around the period of national mourning, with momentum
improving as the season has progressed .
Gaming revenue increased by 29%. Pro forma revenue was 5% higher
driven by continued strong player momentum with gaming AMPs 9%
higher.
Retail
Retail revenue was 3% lower with reduced footfall due to the hot
summer weather. In the UK, revenue declined 4% but was 5% ahead of
the pre-Covid level of 2019. In Ireland, revenue was in line with
the prior year but remained 27% lower than 2019 due to continued
low footfall from changes in working patterns.
Australia
Sportsbet delivered good player retention levels despite
challenging Covid comparatives with AMPs growing 1% year-on-year.
Revenue declined by 21% reflecting lower levels of player
engagement compared to the prior year when more than 60% of the
country was in lockdown, combined with high levels of
weather-related racing disruption. Net revenue margin of 11.1% was
flat when compared with the prior year, as the benefit of bookmaker
friendly sports results and structural margin improvements were
offset by increased investment in promotional generosity to drive
customer retention and engagement ahead of the spring carnival
.
International
Total Sports(5) Gaming Average monthly
players(2)
Q3 2022 Q3 2021 YoY YoY YoY YoY Q3 2022 YoY%
Unaudited revenue % % % % (000s)
GBPm CC CC CC
------- --------- ------ ----------
International reported 466 299 +56% +43% +99% +32% 3,176 +35%
International pro
forma 529 489 +8% +5% +18% +1% 3,416 +14%
----------------------- ------- ------- ---- ---- --------- ------ ----------
Two months of Sisal revenue have been included in reported
growth of 43%. On a pro forma basi s revenue was 5% higher or 11%
higher excluding the impact of guided headwinds in the quarter(4)
.
Pro forma revenue in our 'consolidate and invest' markets(4) ,
which accounted for 78% of International revenue in the quarter,
was 15% higher. Sisal continued its strong momentum from H1 with
pro forma revenue and player growth of 19% and 27% respectively due
to strong online performance, while retail volumes were maintained.
In India, we continued to grow strongly with revenue 78 % higher
driven by a 75% increase in players.
(1) Constant currency ("cc") growth is calculated by
retranslating the non-sterling denominated components of Q3 2021 at
Q3 2022 exchange rates. Growth rates in the commentary are in local
or constant currency.
(2) Average Monthly Players represent the average number of
players who have placed and/or wagered a stake and/or contributed
to rake or tournament fees during the month in the reporting
period. Average Monthly Player numbers now include Junglee players,
and Q3 2021 comparative figures have been adjusted to show a like
for like comparison.
(3) Online sportsbook market share is the GGR market share of
FanDuel and FOX Bet for Q3 2022 in the states in which FanDuel was
live, based on published gaming regulator reports in those states.
During Q3 2022 FanDuel was live in 16 states; Arizona (AZ),
Colorado (CO), Connecticut (CT), Illinois (IL), Indiana (IN), Iowa
(IA), Kansas (KS), Louisiana (LA), Michigan (MI), New Jersey (NJ),
New York (NY), Pennsylvania (PA), Tennessee (TN), Virginia (VA),
West Virginia (WV) and Wyoming (WY). During Q3 FOX Bet was live in
4 states; CO, NJ, MI and PA. Market share does not include AZ, IL
and KS for September as the data has yet to be released. Online
gaming market share reflects the combined CT, MI, NJ, PA and WV
market share of our gaming brands.
(4) Guided headwinds reflect the impact of the temporary market
exit from the Netherlands, and the effects of the ongoing war in
Ukraine on our business in Russia and the Ukraine. Consolidate and
invest markets in International are per our interims results
presentation on 12 August, namely Italy, Spain, Georgia, Armenia,
Brazil, Canada, India and Turkey.
(5) Sports revenue includes revenue from sportsbook, exchange,
daily fantasy sports, advance deposit wagering and B2B product
verticals.
Analyst briefing:
The Group will host a questions and answers call for institutional
investors and analysts this morning at 9:00am (GMT). To dial into
the conference call, participants need to register here where they
will be provided with the dial in details to access the call.
Contacts:
Investor Relations:
Paul Tymms, Group Director of Investor
Relations and FP&A + 44 75 5715 5768
Ciara O'Mullane, Investor Relations + 353 87 947 7862
Liam Kealy, Investor Relations + 353 87 665 2014
Press:
Kate Delahunty, Corporate Communications + 44 78 1077 0165
Lindsay Dunford, Corporate Communications + 44 79 3197 2959
Rob Allen, Corporate Communications + 44 75 5444 1363
Billy Murphy, Drury Communications + 353 1 260 5000
James Murgatroyd, Finsbury + 44 20 7251 3801
------------------------------------------------- -------------------
About Flutter Entertainment plc:
Flutter Entertainment plc (the "Group") is a global
sports-betting and gaming company reporting as four divisions:
-- UK & Ireland: includes the Sky Betting and Gaming, Paddy
Power, Betfair and Tombola brands offering a diverse range of
sportsbook, exchange and gaming services across the UK and Ireland,
along with over 600 Paddy Power betting shops.
-- Australia: the Sportsbet brand offers online sport betting
and is the Australian market leader.
-- International: includes PokerStars, Sisal, Adjarabet, Betfair
and Junglee operating in multiple jurisdictions around the world
offering a diverse range of sportsbook, exchange and gaming
services.
-- US: includes FanDuel, TVG, Stardust, FOX Bet and PokerStars
brands, offering regulated real money and free-to-play sports
betting, online gaming, daily fantasy sports and online racing
wagering products to customers across various states in the US and
Canada.
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