FY13 TRADING & STRATEGY UPDATE MOMENTUM BUILDING FROM EARLY SUCCESS 7 May 2013
IMPORTANT INFORMATION This presentation is not intended to and does not constitute, or form part of, an offer, invitation or the solicitation of an offer to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of any securities, or the solicitation of any vote or approval in any jurisdiction. Goldman Sachs International, which is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority in the United Kingdom, is acting as financial adviser to Betfair Group plc (“Betfair”) and for no one else in relation to the matters described in this presentation and will not be responsible to anyone other than Betfair for providing the protections afforded to clients of Goldman Sachs International nor for providing advice in connection with the matters described in this presentation or any matter referred to herein. Morgan Stanley & Co. International plc, which is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority in the United Kingdom, is acting as financial adviser to Betfair and for no one else in relation to the matters described in this presentation. In connection with such matters, Morgan Stanley & Co. International plc, its affiliates and their respective directors, officers, employees and agents will not regard any other person as their client, nor will they be responsible to anyone other than Betfair for providing the protections afforded to their clients or for providing advice in connection with the matters described in this presentation or any matter referred to herein. Barclays Bank PLC, acting through its investment bank ("Barclays"), which is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority in the United Kingdom, is acting as financial adviser to Betfair and for no one else in connection with the matters described herein and will not be responsible to anyone other than Betfair for providing the protections afforded to its clients or for providing advice in relation to the matters described in this announcement or any transaction or arrangement referred to herein. The directors of Betfair accept responsibility for the information contained in this presentation and, to the best of their knowledge and belief (having taken all reasonable care to ensure that such is the case), the information contained in this presentation is in accordance with the facts and does not omit anything likely to affect the import of such information. 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Other unknown or unpredictable factors could cause actual results to differ materially from those in the forward-looking statements. Such forward-looking statements should therefore be construed in the light of such factors. Neither Betfair, nor any of its respective associates or directors, officers or advisers, provides any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward- looking statements in this presentation will actually occur. You are cautioned not to place undue reliance on these forward-looking statements. Other than in accordance with its legal or regulatory obligations (including under the UK Listing Rules and the Disclosure and Transparency Rules), Betfair is not under any obligation, and Betfair expressly disclaims any intention or obligation, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Certain data in this presentation, including financial, statistical and operating information, has been rounded and therefore figures are approximate. As a result of such rounding, the totals of data presented in this presentation may vary slightly from the actual arithmetic totals of such data. 2
HIGHLIGHTS Stronger than Results above top end of guidance range • expected FY13 Cost savings increased to £30m, with full impact in FY14 • Regulated revenue mix up to 75% • Excellent Recent performance indicates product & marketing • Progress on investment is working delivery Cultural shift is underway • Focused on mitigating upcoming tax impact • Sustainable international expansion • Accelerating growth Balance sheet flexibility / M&A opportunities • Momentum building from early success 3
FY13 UPDATE 4
FY13 TRADING UPDATE FY13 FY12 YoY % Revenue £388m Flat c.£387m Underlying EBITDA 1 c.£73m £86m -c.15% Free cash flow 2 £44m -16% £37m Cash balance £118m +42% £168m Year end headcount 1,832 2,286 -20% 1 Figures represent underlying results, which exclude, where relevant, separately disclosed items, including redundancy costs. FY13 underlying EBITDA is an estimate. 2 Free cash flow represents cash flow from operations less cash flow associated with capital expenditure and taxes . Results are from continuing operations excluding LMAX 5
FY13 RESULTS ABOVE GUIDANCE FY13 Guidance Drivers Better than expected £370m to • Revenue c.£387m sportsbook performance £385m (acquisition & margin) International revenues • resilient despite ceasing £65m to Underlying EBITDA 1 c.£73m investment £70m Beat our guidance due to revenue outperformance 1 Figures represent underlying results, which exclude, where relevant, separately disclosed items, including redundancy costs. FY13 underlying EBITDA is an estimate. 6
FY13 UNDERLYING REVENUE GROWTH OF 6% £388m c.£387m +£23m £364m -£24m FY12 Regulatory FY12 FY13 Underlying Impact 1 adjusted change Broadly flat revenues achieved despite regulatory impact 1 Year on year decline in revenues from Greece, Germany, Cyprus and Spain Exchange Results are from continuing operations excluding LMAX 7
FY13 UNDERLYING EBITDA CHANGE £86m £77m c.£73m -£9m -£4m FY12 Change in FY12 Underlying FY13 capitalisation change (adjusted for devex change) of devex Underlying EBITDA affected by regulatory change partially offset by growth in sustainable jurisdictions Underlying EBITDA excludes separately disclosed items, including redundancy costs. FY13 underlying EBITDA is an estimate. Results are from continuing operations excluding LMAX 8
FY14 COST SAVINGS INCREASED TO £30M Entered FY14 with c.500 fewer employees than FY13 • average Employment c.£23m costs Majority of development activity shifted to near shore • locations (Romania, Portugal) Professional services • External Facilities • c.£7m costs Travel & entertainment • Telecom & data services • TOTAL c.£30m Now December Estimated savings c.£20m c.£30m Full impact in FY14 Over 2 years Timing of savings Underway Completed Action required c.£20m c.£20m Cost to deliver Cost savings higher and earlier than expected; re-investing in customer facing product & marketing (c.£10m) 9
• Expect to grow UK revenues in-line with the market • International revenues more resilient than expected Revenue • Opportunity to exploit international optionality • Balance sheet flexibility creates acquisition opportunities • Full impact of c.£30m cost savings in FY14 • Re-investing c.£10m in product & marketing Profitability • Focused on mitigating upcoming tax impact • Scale can drive margin expansion 10
OUR PLAN 11
WHAT WE SAID IN DECEMBER (1) 12
WHAT WE SAID IN DECEMBER (2) 13
OUR PLAN 1 Focus on sustainable revenues 2 Invest in our products and brand for growth 3 Introduce greater accountability & discipline 4 Accelerate growth through sustainable international expansion and disciplined M&A 14
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