FY15 Results 30 th November 2015 Overview Carl Leaver FY15 Results - PowerPoint PPT Presentation

FY15 Results 30 th November 2015

Overview Carl Leaver FY15 Results Paul Bowtell FY15 Highlights Carl Leaver Summary Carl Leaver Q&A 1

Disclaimer Forward-Looking Statements This presentation may include forward-looking statements. All statements other than statements of historical facts included in this presentation, including those regarding Gala Coral’s financial position, business and acquisition strategy, plans and objectives of management for future operations are forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Gala Coral, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The words “believe,” “anticipate,” “expect,” “predict,” “intend,” “estimate,” “plan,” “aim,” “assume,” “forecast,” “project,” “will,” “may,” “should,” “risk,” “probable” and similar expressions, which are predictions or indications of future events and future trends, which do not relate to historical matters, identify forward-looking statements. All statements other than statements of historical facts included in this presentation including, without limitation, in relation to the Group’s investment performance, results of operations, financial position, liquidity, prospects, growth potential, strategies and information about the macro-economic, industry and regulatory environment in which the Group operates are forward-looking. Readers of this presentation should not rely on forward-looking statements because, by their nature, such forward-looking statements involve known and unknown risks and uncertainties that could cause the Group’s actual results, performance or achievements and the development of the industry in which it operates to be materially different from those expressed in, or suggested by, the forward-looking statements contained in this presentation. These forward-looking statements are made as of the date of this presentation and are not intended to give any assurance as to future results. Neither the Group nor any of the Group’s Directors or other officers undertake any obligation, except as required by law or by any appropriate regulatory authority, to presentation publicly any revisions or updates to these forward-looking statements to reflect events that occur, circumstances that arise or new information of which they become aware after the date of this presentation. 2

Overview FULL YEAR HIGHLIGHTS • Total Coral Group EBITDA of £205.3m was £2.7m or 1% ahead of last year despite • Regulatory / tax headwinds ( £45.6m) • No World Cup (£7.9m ) • Underlying EBITDA growth of 30% after adjusting FY14 for regulatory impacts and World Cup • Market leading growth in Online: EBITDA of £56.2m was £6.7m or 14% ahead: • Coral.co.uk net revenue +62% • Galabingo.com net revenue +26% • 972k first time depositors (Coral.co.uk 630k ) • Connect signups now over 325k • UK EGR Awards: Online Operator of the Year and Bingo Operator of the Year • Italy EGR Awards: Online Operator of the Year and Sports Operator of the Year • Underlying EBITDA growth in Coral Retail and strong market share growth in Eurobet Retail • Announced the proposed merger of the Coral Group with Ladbrokes Plc, subject to approval from the Competition and Markets Authority, and agreed the disposal of Gala Retail 3

FY15 Results Paul Bowtell, CFO • FY15 Group Results • Cashflow • Capital Expenditure • Financing • Current Trading 4

FY15 Group Results Continuing Operations [1] FY15 FY14 Change £m £m % Net Revenue Net revenue [2] 1,005.4 945.3 6% - Coral Retail in-line Cost of sales (305.9) (259.9) (18%) - Eurobet Retail -7% - Online +36% Gross profit 699.5 685.4 2% Cost of Sales Marketing costs (Online) (56.1) (46.7) (20%) - Includes £39.9m of incremental tax costs [3] Operating costs (438.1) (436.1) (0%) Operating Costs EBITDA [3] 205.3 202.6 1% - Coral Retail 2% lower - Eurobet Retail 16% higher Depreciation (46.8) (43.3) (8%) - Online 28% higher Amortisation: IFRS (8.4) (8.9) 6% Amortisation Amortisation: UK GAAP (12.9) (12.9) 0% - £12.9m of amortisation is only chargeable under UK GAAP EBIT [3] 137.2 137.5 (0%) [1] Results include all revenue and expenses for the Coral Group and excludes Gala Retail (FY15: £50.6m and FY14: £32.9m), the Casinos disposed of in FY14 (FY15: £0.0m and FY14: £0.2m), Propco rental income (FY15: £5.8m 5 and FY14: £28.2m) and High Roller activity (FY15: -£7.6m and FY14: £0.0m) [2] Statutory turnover of £1,007.6m includes Coral Retail vending machine income of £2.2m which is excluded from Net Revenue [3] EBITDA and EBIT are stated pre-exceptional items [4] In addition to the incremental £39.9m tax costs included in cost of sales, we have incurred an estimated £5.7m of lost EBITDA as a result of the DCMS £50 staking restrictions (total regulatory impact of £45.6m)

FY15 EBITDA Bridge Coral Retail £16.5m Coral.co.uk £10.6m Gala websites £9.2m Coral Telebet £0.6m 1.6 (2.1) 2.2 9.8 (36.9) 20.3 Coral Retail +£19.2m (3.5) 19.2 - Strong Machines performance (7.9) - Good cost control Eurobet Retail - £3.5m Underlying EBITDA growth of £47.5m or 30% - Stakes growth £205.3m £202.6m - Market share gains Coral Retail £4.5m +30.1% +34. Eurobet Retail £1.9m - Poor football results 5% Coral.co.uk £1.0m £157.8m Eurobet.it £0.5m Online +£28.0m - Growth in first-time depositors, actives and spend-per-head [1] [2] [1] [1] Includes EBITDA from continuing Coral Group operations 6 [2] FY15 Coral Group EBITDA (pre-exceptionals) rebased for the estimated impact of Point of Consumption Tax (-£20.4m), the increase in rate of MGD to 25% and DCMS FOBT high staking restrictions (-£16.5m), calculated as if all changes had been in existence for the corresponding periods in FY14

Regulatory Impact Regulation Description & Timing FY15 FY14 [1] FY15 [2] Actual Rebased Annualised £m £m £m Coral Retail MGD @ 25% Rate increased effective March 2015 (10.8) (10.5) (18.8) £50 Stake Supervision Effective April 2015 (5.7) (6.0) (12.3) Coral Retail total impact (16.5) (16.5) (31.1) Online Point of Consumption Tax (POC) Effective December 2014 (28.6) (19.8) (34.1) Coral Telebet Point of Consumption Tax (POC) Effective December 2014 (0.5) (0.6) (0.7) Total Group impact (45.6) (36.9) (65.9) [1] FY14 rebased reflects the impact of regulation as if all changes had been in existence for the corresponding periods as FY15 actuals [2] FY15 annualised reflects the annual impact of regulation as if it had been in place for the whole of FY15 [3] Analysis excludes c£9.5m annual impact of the implementation of MGD at 20% in February 2013 7

Coral Retail FY15 Profit & Loss FY15 FY14 Change £m £m % OTC stakes 1,724.3 1,761.4 (2%) OTC Stakes 1% ahead (excl. large OTC gross win margin % 17.1% 17.5% (0.4pp) staking individual and World Cup) OTC gross win 294.7 309.0 (5%) Positive staking trends in H2 OTC net revenue 293.4 307.6 (5%) Major festivals GW% behind FY14 Machines net revenue 371.9 357.9 4% Machines net revenue + 4% Stadia and other 10.6 10.4 2% - Machines GWPMPW +3 % at Net revenue [1] 675.9 675.9 0% £986 - DCMS impact c5% of gross Cost of sales (172.0) (161.2) (7%) win ( £5.7m ) Gross profit 503.9 514.7 (2%) - B3 slots account for 31% of Operating costs (362.7) (371.7) 2% gross win EBITDA [2] 141.2 143.0 (1%) Cost of sales includes £10.8m of Depreciation [3] (27.1) (27.4) 1% incremental MGD cost EBIT [2] 114.1 115.6 (1%) [1] Net revenue is calculated as gross win less free bets 8 [2] EBITDA and EBIT are stated pre-exceptional items [3] There are no assets in Coral Retail that incur an amortisation charge

Coral Retail Operating Costs FY15 FY14 Change £m £m % Employee (144.3) (148.5) 2.8% Employee Annualisation of FY14 payroll Property (66.8) (68.6) 2.6% efficiencies (see next slide for Shop communications (49.1) (50.4) 2.7% impact of national living wage) Other shop costs (45.4) (48.7) 6.8% Property Central costs (41.2) (44.3) 7.0% Savings from detailed Total LFL Operating Costs (346.8) (360.5) 3.8% procurement review Estate Development: FY14 opened shop costs (11.9) (6.1) Shop communications Sky removed from some shops FY15 opened shop costs (3.2) - FY14 closed shop costs - (2.8) Other shop costs & Central FY15 closed shop costs (0.8) (2.3) VAT rebates and other targeted cost savings Total Operating Costs (362.7) (371.7) 2.4% Memo: FY15 FY14 Shop openings 33 66 Shop closures (16) (24) 17 42 9