Includes the 2015 Paddy Power Betfair plc Annual Report THE BEST Dear diary, YEAR EVER! They say diaries can be unreliable due to the author only recording things from his or her own perspective, ignoring unpalatable truths and twisting the actual events to suit their own self-image, but I promise to avoid such pitfalls here. 2015 was THE BEST YEAR EVER! So much excitement and drama, so many times I found my heart racing like a Kardashian racing towards the opportunity of some free publicity. But before all that, let me tell you about the big news. Become2 As history has shown us repeatedly, one sure way of making something awesome even more awesome is to pair it up with something that’s also awesome. Fact. And because I base all my strategic decisions on the career of the Spice Girls, that’s why, 1 after months and months of serenading with 2 Become 1, I paired up with Betfair. Formerly rivals, now we’re working in tandem to make the world a better place for punters. It’s just like Batman v Superman – only really good, not total muck. By combining the companies’ vast technological capabilities and operational expertise we have created a gambling superpower. This Annual Report is a celebration of a truly extraordinary year in your company’s history. Yours tenderly, Paddy (aged 41) 2015 Group Financial Highlights Sportsbook amounts staked* Dividends per share THE BEST €8,646m +23% 180.0c +18% 2014: €7,003m 2014: 152.0c Dear diary, YEAR EVER! Net revenue (€m)* Adjusted diluted earnings per share** They say diaries can be unreliable due to the author only recording things from his or her own perspective, ignoring unpalatable truths +24% +12% and twisting the actual events to suit their own self-image, but I €1,094.0 332.8c 2014: €881.6m 2014: 297.6c promise to avoid such pitfalls here. 2015 was THE BEST YEAR EVER! So much excitement and drama, so many times I found my heart racing like a Kardashian racing towards the opportunity of Directors and Other Information Contents some free publicity. But before all that, let me tell you about the big news. Directors Legal advisers 2015 Group Financial Highlights 1 Become2 Gary McGann Chairman Arthur Cox Directors and Other Information 1 Breon Corcoran Chief Executive Officer Earlsfort Centre Chairman’s Statement 4 As history has shown us repeatedly, one sure way of making Andy McCue Chief Operating Officer Earlsfort Terrace Chief Executive’s Statement 5 Alex Gersh Chief Financial Officer Dublin 2 Operating & Financial Review 8 something awesome even more awesome is to pair it up with Ian Dyson Senior Independent Director Corporate Social Responsibility 24 Zillah Byng-Thorne Non-executive Director Freshfields Bruckhaus Deringer LLP Board of Directors 32 something that’s also awesome. Fact. And because I base all my Michael Cawley Non-executive Director 65 Fleet Street Directors’ Report 36 Danuta Gray Non-executive Director London EC4Y 1HS Directors’ Statement on Corporate strategic decisions on the career of the Spice Girls, that’s why, 1 Peter Jackson Non-executive Director Governance 41 after months and months of serenading with 2 Become 1, I paired up Stewart Kenny Non-executive Director Auditor Audit Committee Report 52 Pádraig Ó Ríordáin Non-executive Director KPMG Directors’ Remuneration Report 58 with Betfair. Formerly rivals, now we’re working in tandem to make Peter Rigby Non-executive Director 1 Stokes Place Statement of Directors’ Responsibilities 79 St Stephen’s Green Independent Auditor’s Report 80 the world a better place for punters. It’s just like Batman v Company Secretary and Registered Dublin 2 Consolidated Income Statement 84 Consolidated Statement of Superman – only really good, not total muck. By combining the Office Edward Traynor Principal bankers Comprehensive Income 85 Consolidated Statement of companies’ vast technological capabilities and operational expertise Power Tower Allied Irish Banks p.l.c. Financial Position 86 Belfield Office Park Barclays Bank PLC Consolidated Statement of Cash Flows 87 we have created a gambling superpower. Beech Hill Road Lloyds TSB Bank plc Consolidated Statement of Changes in Clonskeagh National Australia Bank Limited Equity 88 Dublin 4 The Royal Bank of Scotland Group plc Notes to the Consolidated Financial This Annual Report is a celebration of a truly extraordinary year in Statements 90 Stockbrokers Registrars Company Statement of Financial your company’s history. Goldman Sachs International Computershare Investor Services (Ireland) Position 145 Peterborough Court Limited Company Statement of Cash Flows 146 133 Fleet Street Heron House Company Statement of Changes Yours tenderly, London EC4A 2BB Corrig Road in Equity 147 Sandyford Industrial Estate Notes to the Company Paddy (aged 41) Goodbody Stockbrokers Dublin 18 Financial Statements 149 Ballsbridge Park Five Year Financial Summary 169 Ballsbridge Registered number Dublin 4 16956 * Sportsbook amounts staked represent amounts received in respect of bets placed on sporting and other events that occurred during the year. Net revenue (or ‘income’) represents the net gain on betting transactions (stake less payout) plus the gain or loss on the revaluation of open positions at year end, net winnings on fixed odds and online casino gaming activities, and commission income and tournament fees earned from peer to peer games and business-to-business services. The costs of customer promotions and bonuses are deducted from net revenue. ** Excludes exceptional items as set out in note 6 to the consolidated financial statements. PADDY POWER BETFAIR PLC Annual Report 2015 1 January/February 2015 Dear diary, Obviously I’m an incredible person, but part of being incredible is acknowledging that sometimes things don’t go to plan. True perfection has to be imperfect. Someone clever said that. Einstein. Or Noel Gallagher. That’s how I sum up my attempts to get David Ginola elected as FIFA President. I’ll be the first to admit it didn’t go so well. In January - long before the FBI raids, multiple arrests and shocking news that FIFA actually has an ethics committee - I tried to do something about it – to run a genuine football man to stand against the regime to FBI win back the beautiful game. #missingballs So, I teamed up with reform group Change FIFA to back a shock bid from footballing legend David Ginola. Together, we launched Team Ginola, with a manifesto based on Transparency, Integrity and Equality - and specific, radical policies for each. In February I was Down Under for the start of the Cricket World Cup, just in time for And it’s fair to say the whole project was a resounding success. Well, ‘success’ if the goal Australian self-confidence to reach Kanye West levels and the arrival of England, aka the Poms. of the exercise was to get the sports media to hate us and get the typical football In conjunction with their New Zealand neighbours, the Aussies were hosting the tournament and supporter to respond to us with indifference. What was it about the exceedingly handsome, they kicked off their bid for glory with a blockbusting game against their oldest, fiercest and highly toned, wealthy, Frenchman with fantastic hair that failed to resonate with your probably moaniest cricketing enemies. That was the perfect opportunity to kick the hornets’ average football fan? Hmmm … I may never truly know. nest. Kick it, then slog that hornets’ nest over mid-wicket for six. Playing upon the classic cricketing stereotypes of the Baggy Greens’ brashness and the classic JUST F**K perception of the English players being a bit vanilla and lacking bottle in high-pressure situations, I brilliantly came up with the Missing Balls campaign. I went around Melbourne putting up posters which said ‘MISSING: Pair of balls. If found please return to the English cricket OFF ALREADY! team #missingballs’. Because the posters weren’t accompanied by Sportsbet branding, there was no trouble getting social media thumbs and actual media tongues wagging about who was responsible. The ninja style stealth of the campaign sucked in people from all walks of life. Even my Australian competitors at Ladbrokes failed to guess who might have been behind the mischief, tweeting it on their own Twitter account. If that chatter wasn’t enough, the highlight came when I hired a helicopter and flew a giant banner of the poster above the ground while England trained ahead of the match and then displayed the poster on digital billboards along the route the England team bus took en route to the ground on matchday. LOLZ. The whole campaign went down extremely well somewhat helped by the visitors producing the most underwhelming English performance on Australian soil since Lily Allen rubbed shoulders with Dr. Karl Robinson. They were hammered by 111 runs and a couple of weeks later found themselves checking in for a return flight home at the same time as such cricketing giants as Afghanistan and Scotland. Yours Pom-bashingly, Paddy January/February 2015 Dear diary, Obviously I’m an incredible person, but part of being incredible is acknowledging that sometimes things don’t go to plan. True perfection has to be imperfect. Someone clever said that. Einstein. Or Noel Gallagher. That’s how I sum up my attempts to get David Ginola elected as FIFA President. I’ll be the first to admit it didn’t go so well. In January - long before the FBI raids, multiple arrests and shocking news that FIFA actually has an ethics committee - I tried to do something about it – to run a genuine football man to stand against the regime to FBI win back the beautiful game. #missingballs So, I teamed up with reform group Change FIFA to back a shock bid from footballing legend David Ginola.