L db Ladbrokes plc k l Interim Results 5 August 2010 5 August 2010
page 1 Peter Erskine Chairman Chairman
Brian Wallace Group Finance Director Group Finance Director page 2
S Summary of performance f f Half Year ended 30 June (1) 2010 2009 Variance (Continuing operations) £m £m B(W) % Net revenue (excluding High Rollers) 492.1 504.4 (2.4) Operating profit (excluding High Rollers) 103.6 98.6 5.1 High Rollers 8.9 58.4 (84.8) Operating profit 112.5 157.0 (28.3) Net finance income / (costs) (2) 2.2 (25.7) 108.6 Tax (3) 240.1 (19.7) 1,318.8 Retained profit 354.8 111.6 217.9 EPS (4) 39.3p 15.8p 148.7 EPS (excluding HMRC benefit) (4) EPS ( l di HMRC b fi ) (4) 8 8.5p 1 15.8p 8 (46 2) (46.2) EPS (excluding HMRC benefit and High Rollers) (4) 7.7p 8.8p (12.5) (1) Before non-trading items (2) 2010 includes £20.0 million interest credit following the HMRC tax settlement ( ) g (3) 2010 includes £261.9 million tax credit following the HMRC tax settlement (4) 2009 adjusted for the bonus element of the rights issue announced on 8 October 2009 page 3
B tti Betting and Gaming (excluding High Rollers) d G i Net revenue Net revenue Operating profit Operating profit Half Year ended 2010 2009 Variance 2010 2009 Variance 30 June £m £m B(W) £m £m £m B(W) £m UK Retail 332.7 343.6 (10.9) 76.9 82.1 (5.2) Other European Retail 64.9 67.1 (2.2) 7.7 5.1 2.6 eGaming 85.6 84.6 1.0 29.1 20.8 8.3 Core Telephone Betting 8.9 9.1 (0.2) (0.3) (1.4) 1.1 Corporate costs (1) - - - (9.8) (8.0) (1.8) Total 492.1 504.4 (12.3) 103.6 98.6 5.0 (1) In the published interim and preliminary results for 2009 Corporate costs and International development costs were disclosed separately. These are now combined as Corporate Costs page 4
UK R t il UK Retail Half Year ended 30 June Half Year ended 30 June £10.1m £(22.1)m £(0.3)m £2.8m £82.1m £8.2m £76.9m £76 9 £(8.1)m £4.2m EBIT 2009 World Cup… OTC GW - T/O OTC GW - % margin Machines GW Lower … Net VAT & GPT Cost savings EBIT 2010 page 5
UK R t il UK Retail – per shop h Half Year ended 30 June a ea e ded 30 Ju e 2010 0 0 2009 009 B(W)% ( )% £000 / shop £000 / shop Average no. of shops 2,082 2,091 (0.4) OTC Gross Win 99.8 (8.6) 109.2 OTC Gross Win margin 16.3% 16.7% Machine Gross Win 71.1 3.3 68.8 Total Net Revenue 158.0 (2.9) 162.8 Gross profits tax (14.9) 8.6 (16.3) Operating costs (107.1) 0.9 (108.1) EBIT 36.0 (6.3) 38.4 EBITDA 45.9 (5.4) 48.5 Excludes greyhound tracks and income from associates page 6
UK R t il UK Retail – operating costs ti t 2010 2009 Variance B(W) ( ) Half Year ended 30 June £m £m H2 considerations £m % Staff costs (99.2) (99.3) 0.1 0.1 Pay freeze ongoing; premium pay savings in Q4; performance bonus offset offset Property costs (46.8) (47.1) 0.3 0.6 Still plan to open 50 new licences in 2010 Content costs (23.5) (22.4) (1.1) (4.9) Contract +RPI, plus higher VAT costs Levy (8.9) (10.9) 2.0 18.3 Dependent on horse performance Deprec – F&F (18.3) (19.0) 0.7 3.7 Deprec – machines (2.5) (2.5) - - NBV £10m with 2 years of depreciation remaining depreciation remaining Other costs (27.2) (28.0) 0.8 2.9 Includes AMLD, shop consumables (slips, papers etc), marketing & shop maintenance Operating costs Operating costs (226 4) (226.4) (229 2) (229.2) 2 8 2.8 1 2 1.2 Average No. of shops 2,082 2,091 page 7
Oth Other European Retail E R t il Net Revenue Net Revenue Operating Profit Operating Profit Comment Comment Half Year ended 2010 2009 B(W) 2010 2009 B(W)% 30 June £m £m % £m £m Ireland 39.9 42.3 (5.7) 5.7 5.4 5.6 CC NR down 3.9% € impact CC costs 4.7% lower Belgium 25.0 24.8 0.8 2.9 1.8 61.1 Lower levels of turnover offset by better margin offset by better margin Lower Duty and costs € impact Spain Spain - - - - - - (0 9) (0.9) (2 1) (2.1) 57 1 Encouraging JV trends 57.1 Encouraging JV trends Total 64.9 67.1 (3.3) 7.7 5.1 51.0 page 8
eGaming G i Half Year ended 30 June 2010 2009 B(W)% Unique active players (1) (000s) 626 592 5.7 Real money sign-ups (1) (000s) 266 249 6.8 Adjusted cost per acquisition (1) £88 £91 3.3 £2.4m Cost per acquisition (1) Cost per acquisition £128 £128 £144 £144 11.1 11.1 £29.1m £4.9m £(2.0)m £0.3m £3.0m £(0.3)m £20.8m EBIT 2009 Sportsbook Poker Casino Bingo GPT Cost EBIT 2010 savings savings Relates to change in Net Revenue (1) See appendices for definitions page 9
eGaming – Net revenue G i N t Half Year ended 30 June Half Year ended 30 June 2010 2010 2009 2009 Variance Variance £m £m B(W) % Sportsbook 33.5 30.5 9.8 Casino 26.5 26.8 (1.1) Poker 10.7 12.7 (15.7) Games 8.5 8.5 - Bingo 6.4 6.1 4.9 Net revenue 85.6 84.6 1.2 page 10
eGaming – operating costs G i ti t Half Year ended 30 June a ea e ded 30 Ju e 2010 0 0 2009 009 B(W)% ( )% 19% 19% 20% 20% £m £m Levy & licences 0.4 1.7 76.5 1% Staff costs 11.2 10.8 (3.7) 6% Software & geographical partners (1) (1) 10.4 10.8 3.7 Marketing (inc affiliates) 20.2 21.2 4.7 Banking & chargebacks 3.7 3.6 (2.8) 18% Other costs (inc depn) Other costs (inc. depn) 10.6 10 6 10 8 10.8 1 9 1.9 36% Operating Costs 56.5 58.9 4.1 Staff Marketing Software & partners S ft & t Banking / chargebacks Levy & licences Other Numbers in pie chart relate to 2010 costs (1) Payments to third party software and platform providers and geographical partners page 11
C Cash Flow h Fl Half Year ended 30 June £(164.7)m £694.2m £35.7m £(80.0)m £0.9m £17.6m £503.7m 31-Dec-09 Cash Interest & tax HMRC Capex Exchange & 30-Jun-10 Net Debt generated by charges Settlement other Net Debt operations operations mo ements movements page 12
D bt Debt Maturity profile y p 600 Bank facilities Bond 450 300 £560m £119m £325m 150 £225m £131m £131 0 2011 2012 2013 2014 2015 2016 2017 � During the period: � During the period: � At 30 June 2010 undrawn committed bank � At 30 June 2010 undrawn committed bank facilities of £669.9m • Bought back £119m of 2012 bonds • Issued £225m of 2017 bonds � Half Year end leverage • Unwound interest rate swaps Net debt to EBITDA ratio 2.2x Net debt to EBITDA ratio* 2.4x * Adjusted for High Rollers page 13
Richard Glynn CEO CEO
I t Introduction - Galvanise d ti G l i Review Structure Operational Goals Rigorous & & & & Implementation Weaknesses Personnel Imperatives Priorities page 15
F Facing the challenges i th h ll Too much Too little Too many � Brand over-reliance � Strategic focus � Silos � “e” excellence � Taking customers for granted � Sub-optimal supply terms � Group operational focus � Wasted investment � Priorities � Controlled risk taking & innovation � Excuses � Product sterility � Owned IP rights � Customer insight � Responsibility & accountability page 16
St Strong foundations f d ti Best brand recognition in the industry B t b d iti i th i d t High quality retail estate g q y Only retail bookmaker with a loyalty scheme Balance sheet strength Strong regulatory reputation Very loyal and willing team of employees Very loyal and willing team of employees page 17
D Dealing with the consequences li ith th Critical Success Factors Critical Success Factors page 18
O Our approach to Shareholder Value h t Sh h ld V l Customer focus Customer focus Retail excellence ‘e’ excellence Technology & T Trading excellence di ll Brand effectiveness Regulatory leadership page 19
C Current Structure & Responsibilities t St t & R ibiliti Ri h Richard Glynn d Gl CEO John O’Reilly John O’Reilly Chris Palmer Chris Palmer Richard Ames Brian Wallace Andrew Harley MD Remote Corporate MD UK & Ireland Group Finance Group HR Development Betting & Retail Director Director Gaming Director Retail eGaming Finance External comms HR Marketing International IT Lobbying Internal Comms Loyalty Spain Tax PR Reward Marketing Treasury Development Trading Trading In estor relations Investor relations HR Ser ices HR Services Secretariat Legal Belgium page 20
N New Structure & Responsibilities St t & R ibiliti Ri h Richard Glynn d Gl CEO Gary McIlraith Richard Ames TBA Brian Wallace Nick Rust Andrew Harley Digital Channels Consumer Consumer International & Group Finance Retail Group HR Operations Experience Strategy eGaming (UK & Intl) Trading & trading ops Finance UK Marketing HR Group strategy IT Tax Ireland Brand & Values Internal Comms CRM strategy Customer service Treasury Spain Loyalty/OddsOn! Reward Customer acquisition High Value Customers Investor Relations Belgium Customer experience Development Mobile M bil Process innovation P i ti Secretariat S t i t Telephone betting T l h b tti C Customer research t h HR Services HR S i International dev Security Procurement Customer Comms Project management M&A PR/Regulation/Lobbying Compliance Legal Special Operations BI / Reporting page 21
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