INTERIM RESULTS HALF YEAR ENDED 30 JUNE 2014 12 August 2014 - PowerPoint PPT Presentation

INTERIM RESULTS HALF YEAR ENDED 30 JUNE 2014 12 August 2014

Disclaimer Certain statements included or incorporated by reference within this presentation may constitute "forward looking statements" in respect of the operations, performance, prospects and/or financial condition of Ladbrokes plc (the “Company”). Generally, words such as “may”, “could”, “will”, “expect”, “intend”, “estimate”, “anticipate”, “aim”, “outlook”, “believe”, “plan”, “seek”, “continue” or similar expressions identify forward looking statements. Such statements are inherently predictive and speculative and are based on the Company’s current expectations and b eliefs concerning future events and are subject to a number of known and unknown risks and uncertainties beyond the Company’s control that coul d cause actual future financial condition, performance or results to differ materially from any plans, goals and expectations referred to in these forward looking statements. Such statements are also based on numerous assumptions regarding the Company’s present and future strategy and the environment in which it operates, which may not be accurate. The Company undertakes no obligation to update any forward looking statements contained in this presentation or any other forward looking statements it may make, save in respect of any requirement under applicable law or regulation. Nothing in this presentation should be construed as a profit forecast. Past performance cannot be relied upon as a guide to future performance and persons needing advice should consult an independent financial adviser. No representation or warranty (express or implied) of any nature is given nor is any responsibility or liability of any kind accepted by the Company or any of its directors, officers, employees, advisers, representatives or other agents, with respect to the truthfulness, completeness or accuracy of any information, projection, representation or warranty (expressed or implied), omissions, errors or misstatements in this presentation, or any other written or oral statement provided. Nothing contained in this presentation is intended to constitute an invitation or inducement to engage in investment activity for the purposes of the prohibition on financial promotions in section 21 of the UK Financial Services and Markets Act 2000. In making this presentation available, the Company makes no recommendation to buy, sell or otherwise deal in shares of the Company or in any other securities or investments whatsoever and you should neither rely nor act upon, directly or indirectly, any of the information contained in this presentation in respect of any such investment activity. This presentation may not be reproduced (in whole or in part), distributed or transmitted to any other person without the prior written consent of the Company and is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use would be contrary to local law or regulation . Any recipients of this presentation outside the UK should inform themselves of and observe any applicable legal or regulatory requirements in their jurisdiction, and are treated as having represented that they are able to receive this presentation without contravention of any law or regulation in the jurisdiction in which they reside or conduct business. In particular, the securities referred to in this presentation have not been and will not be registered under the U.S. Securities Act of 1933 and may not be offered, sold or transferred within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act of 1933. 2

INTRODUCTION Peter Erskine, Chairman

AGENDA Financial Overview Ian Bull, CFO Operational Review Richard Glynn, CEO Q&A

Group Financial Performance Summary 13H1 Variance £m 14H1 (1) Net revenue 577.8 563.0 +2.6%  H1 results: (1) (2)  Staking +4.4% ex. W’Cup , Aus, HR Net revenue ADJ 577.8 568.5 +1.6%  H1 industry wide sporting results impacted margin (1)(3) Operating profit 85.7 (33.7)% 56.8 Finance costs (12.8) (12.2) (4.9)%  Tax: rate in line with guidance (1) Profit before tax 44.0 73.5 (40.1)%  Interim dividend: 4.3p per share Effective tax rate 10.0% 12.2% consistent with Board commitment of 8.9p per share for 2014 High Rollers 10.7 3.4 n/a  High Rollers: strong contribution (1) Underlying EPS 4.3p 7.0p (38.6)% Dividend - 4.3p 4.3p Net Debt 425.9 375.5 (13.4)% Before exceptional items (1) Excluding High Rollers (2) 2013 net revenue has been restated for the MGD/VAT impact to enable like for like comparison (3) Includes amortisation of acquisition related intangible assets of £2.7m in 14H1 and £1.7m in 13H1 5

Group Operating Profit Significant results impact; underlying trends as expected £(15.6)m £0.3m £(3.1)m £(7.8)m £85.7m £(2.7)m £56.8m 13H1 EBIT UK Retail European Retail Telephone Digital Corp Costs 14H1 EBIT  Overall  H1 EBIT ahead of H2 13 (1) as guided  Industry-wide poor Q1 football and June horse festivals (2) – combined gross win impact yoy £29.3m  Good World Cup contributes H1: £18.5m gross win  Corporate costs: £11.1m in H1 – expect FY14 to be towards upper end of guidance range (1) EBIT for the six months to December 2013 £52.6m (2) Reflecting the year-on-year of losses on football in weeks 2, 4 and 12 in 14Q1 and at Ascot and Epsom festivals in June 2014 6

UK Retail Operating Profit Underlying OTC gross win stable, machine growth, cost trends better £(1.8)m £(5.0)m £3.0m £3.8m £0.9m £(4.4)m £(2.1)m £(1.6)m £(16.9)m £8.5m £73.2m Adjusted Operating costs +4.3%, gross win £57.6m ahead of guided of c.5% growth (2) LFL costs +2.6% 13H1 EBIT Sporting World Cup OTC gross Machine GPT/ MGD & Content Other costs D&A SIS income 14H1 EBIT results (1) win, gross win Freebets VAT costs adjusted (2)  OTC Staking: +5%; football +54% supported by SSBTs/World Cup offset horses/greyhounds -2%  Gross win: broadly stable OTC gross win (adjusted) (2) ; machines growth, Clarity offsets ABB impact  Rigorous cost focus continues : operating costs +4.3%. Staff scheduling, procurement and property savings. Further cost focus in H2, expect £3-4m savings. FY cost growth +4.4% vs. +5% guidance  Estate optimisation: 29 shops closed by 30 June; exceptional costs of £13.9m (3) , H1 cash of £1.5m (4) (1) Reflecting the year-on-year of losses on football in weeks 2, 4 and 12 in 14Q1 and at Ascot and Epsom festivals in June 2014 (2) Adjusted for the sporting results and World Cup gross win figures in the graph above (3) Reflects the exceptional costs of the c.50 shop closures, 29 shops were closed by 30 June 2014 and the remainder in 14H2 (4) Cash impact in 14H2 being £0.9m and afterwards of £5.2m 7

UK Retail Gross Win Q1 results impact evident, machine returned to underlying growth Gross Win per Shop Analysis (1) (£’000) OTC trends  Staking trends continue – strong increase in 88 89 90 89 94 96 93 95 91 95 94 100 85 92 86 football, continued decline in traditional products 80  Q1 gross win per shop heavily impacted by 60 football results 40  Recovery in Q2 helped by good World Cup off- 20 setting June horse festivals 0 Machine growth 11Q1 11Q2 11Q3 11Q4 12Q1 12Q2 12Q3 12Q4 13Q1 13Q2 13Q3 13Q4 14Q1 14Q2  Q2 impacted by ABB Code. Clarity benefit as Machine GW per shop OTC GW per shop roll-out completed prior to World Cup Machine Gross Win Growth yoy  Clarity performance as expected driving growth Total machine Machine GW per shop per in GW per shop GW week Q3 2013 +0.7% (5.0)%  Target 1-2% lfl growth in H2 Q4 2013 +2.5% (2.4)% Q1 2014 +2.2% (1.1)% Resilient format with strong cash generation: Operating FCF (2) of c.£68.0m (13H1: £69.5m). Q2 2014 +1.5% +0.4% H1 capex £9.4m (13H1: £21.4m) (1) Analysis excludes greyhound tracks (2) Operating FCF = EBITDA - Capex 8

Digital Operating Profit Strong Sportsbook growth; costs well controlled 14H1 EBIT: Betdaq flat Australia £(0.1)m Belgium £(1.0)m £(8.5)m Spain JV £(1.2)m £9.4m £1.2m £(4.6)m £(8.1)m £(0.1)m £11.1m £4.9m £(2.3)m £5.3m £3.0m 13H1 EBIT, Sporting World Cup Sportsbook Gaming NGR Betting tax D&A Other 14H1 EBIT, Betdaq, 14H1 EBIT reported ex. results NGR NGR NGR, operating LFL Australia, Betdaq (1) adjusted (2) costs Spain JV & Belgium  Digital NGR (1) : stable year on year – Sportsbook, strong growth; Casino performance as expected  Digital Costs: good cost control, broadly flat on 2013; depreciation in line with FY guidance  Australia/Betdaq: strong growth in revenue, expect positive EBIT contribution in H2  European Digital: launch of Ladbrokes.be and Sportium.es – further spend to fund development in Q3/Q4 (1) Reflecting the year-on-year of losses on football in weeks 2, 4 and 12 in 14Q1 and at Ascot and Epsom festivals in June 2014 (2) Adjusted for the sporting results and World Cup revenue figures in the graph above 9