INTERIM RESULTS Half Year Ended 30 June 2016 4 August 2016 - PowerPoint PPT Presentation

INTERIM RESULTS Half Year Ended 30 June 2016 4 August 2016

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INTRODUCTION John Kelly Chairman

Jim Mullen Chief Executive

Four key pillars to build a better Ladbrokes UK: UK: AUSTRALIA: INCREASE GROW UK: GROW FOOTFALL RECREATIONAL DEVELOP MARKET CUSTOMER MULTI-CHANNEL IN SHARE BASE RETAIL Health & Safety Responsible Gambling 5

2017 targets: Encouraging progress 12 months to June 2016 2015 2014 2017 Targets Actual Actual Actual Net revenue per shop (1) > FY14 UK Retail £392k £377k £356k EBIT per shop (2) > FY14 £54k £51k £42k 30% of Group net revenue (3) Digital 22.7% 20.3% 18.6% Ladbrokes.com Actives over 1.3m 1.3m 1.1m 960k Ladbrokes More than 2x FY14 net revenue 2.0x 1.7x n/a Australia (4) Strategy is delivering improved customer metrics and improved profitability (1) Excludes revenue from greyhound tracks (2) On a comparable basis and excludes greyhound tracks, associate income and exceptional items (3) Excludes High Rollers 6 (4) Local currency

FINANCIAL OVERVIEW Richard Snow, CFO

H1 2016 – Good underlying trading performance, strong results – EBIT +34.4%  Net revenue growth (1) : +13.1% 16H1 15H1 Variance (+10.4% ex. Euros) £m £m (1)  Operating profit: Net revenue 661.8 585.4 +13.1%  Marketing led strategy and strong (1)(2) product offer delivering Operating profit 52.3 38.9 +34.4 %  Favourable OTC and sportsbook Finance costs (12.5) (14.2) +12.0% results benefitting from the (1) unpredictability of the Premier Profit before tax 39.8 24.7 +61.1% League and Euros Effective tax rate 12.3% 10.2%  Tax: lower than medium term High Rollers (0.1) 2.8 n/a guidance (1) Underlying EPS 3.4p 2.4p +41.7%  Leverage: strong cash generation Interim dividend - 1.0p 1.0p and £35m tax receipt reduces net Net debt 227.2 414.3 (45.2)% debt leverage to 1.3x Before exceptional items (1) Excluding High Rollers 8 (2) Includes amortisation of acquisition related intangible assets of £2.2m in H116 and £2.7m in H115

Group Operating Profit +34.4% £52.3m £2.5m (£0.3m) £2.7m £1.9m £6.6m £38.9m HY15 EBIT UK Retail Digital European Retail Telephone Corp Costs HY16 EBIT  UK Retail: OTC staking stable despite increased margins; BetStation deliver; Machines ahead of expectations driven by slots strategy  Digital: marketing investment driving growth in actives and stakes per active; Gaming strong - regulatory impact as expected  European Retail: Republic of Ireland 4 th consecutive quarter of profitability 9 Before exceptional items

UK Retail – operating profit ahead of expectations £12.0m £(9.3)m £(1.5)m £(8.7)m £14.1m £63.5m £7.9m £56.9m results driven (1) HY15 EBIT OTC Net Revenue Machines Net GPT/MGD Marketing Other Costs/SIS HY16 EBIT Revenue  OTC Net revenue: +7.7% (Q2 +7.4%)  OTC staking flat: stable despite higher margins  BetStation: c.10% of OTC staking in 16H1 vs. c.4% in 15H1 - football and sports growth; gross win up 172% year on year  Gross win margin: 17.4% (+1.4ppts) vs. 5 year average of c.16.5%  Machines: 9 th consecutive quarter of growth (2) driven by slots strategy  Operating costs: 3.8% up on 15H1 (National Living Wage and voluntary single scheduling)  Estate optimisation: 6 closures in H1; c.19 scheduled in H2 10 (1) Calculated by comparing 2016 H1 gross win margin vs. normalised margin of 16.75% (2) On per shop per week yoy basis

UK Retail – trends supportive of our FY17 targets Total Net Revenue Per Shop Trends (1)(2) Net revenue per shop continues to Inc. Euro 2016 Inc. World Cup 201 grow in H1 196 191 186 180 176 180  Customers responding to value proposition – are we winning share?  BetStation gross win +172%  Gaming machines; sustained focus on 12-13 14 H1 14 H2 15 H1 15 H2 16 H1 16 H1 Ave. adj(3) lower staking play OTC net revenue per shop (£000) Machine net revenue per shop (£000) +12.2% ABB Code implementation/  Regular product launches continue to Clarity roll-out £50+ B2 regulation deliver growth in machines gross win implementation +7.9%  Slots the key driver (16H1 40% of +5.9% +4.9% +4.3% +4.6% machine gross win vs. 15H1 38%) +3.7%  Now target net revenue growth of +1.5% +1.5% c.4-5% for FY16 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Machine GW yoy growth (1) 2013 net revenue has been restated for the VAT impact to enable like for like comparison (2) Excludes revenue from greyhounds tracks 11 (3) Calculated using 2015 H2 gross win margin of 16.4%

UK Retail – H1 costs trends broadly in line with guidance, H2 increase 16H1 15H1 Variance  Staff costs – impacted by National Living £m £m Wage and implementation of voluntary single scheduling Staff 108.0 102.4 +5.5%  Property – benefit from shop closures Property 54.8 56.8 (3.5)% Content 47.0 45.9 +2.4%  Marketing includes staff incentives Marketing 12.5 11.0 +13.6% payments for multi-channel (£1.1m) Depreciation 20.4 18.7 +9.1%  Depreciation increase reflects investment Other 42.7 40.2 +6.2% in shop fabric Operating Costs 285.4 275.0 +3.8%  2016 cost guidance c.4-5% increase:  Higher revenue share due to Machines and BetStation outperformance  Staff costs around voluntary single scheduling and higher bonus provisions 12