Changing Flutter Entertainment plc Entertainment Flutter the game Flutter Entertainment plc Annual Report & Accounts 2020 Annual report and accounts 2020 and accounts Annual report Changing the game 2020 was a momentous year for Flutter as we completed our merger with The Stars Group, while navigating our response to Covid from a customer protection, colleague well being and business perspective. Whilst recent events added significant complexity to almost every part of our enlarged Group, we’d like to recognise the hard work, resilience and commitment of all colleagues over the last year. We remain focused on maintaining momentum in the Group whilst bringing the business together and continue to be excited about the opportunities that lie ahead. Peter Jackson Gary McGann Chief Executive Officer Chairman Lift the page to reveal our range of brands As a Group, we operate some of the world’s most innovative, diverse and distinctive sports betting and gaming brands. 9 Global brands 100+ International markets 9 Global brands 14m Customers worldwide We believe in bringing Contents Strategic report entertainment to life for our 2 2020 highlights 4 Investment case customers in a safe, responsible 6 At a glance 8 Chair’s statement and sustainable way. 12 Chief Executive Officer’s Review report Strategic 17 Strategy 18 Key performance indicators 20 Our markets Customers 22 Business model Our leading brands provide entertaining and engaging 30 Stakeholder engagement products in a fun and safe environment to 14 million 35 Sustainability customers globally. 42 Operating and financial review 57 Managing and understanding our principal risks Corporate governance 66 Introduction to Governance 68 Board of Directors Active customers 72 Chair’s introduction 14m 74 Board activities 76 Leadership and purpose 80 Engaging with a broad range of stakeholders Markets 82 Division of responsibilities We are committed to making a positive contribution 84 Composition, succession and evaluation in the 100+ markets in which we operate globally. 88 Nomination Committee report 92 Audit Committee report 100 Risk Committee report 104 Directors’ remuneration report 2020 123 Directors’ Report Financial statements International markets 133 Statement of Directors’ Responsibilities 100+ 134 Independent Auditor’s Report 141 Consolidated Income Statement 142 Consolidated Statement of Other Colleagues Comprehensive Income We have more than 14,000 colleagues across 143 Consolidated Statement of Financial Position five continents. 144 Consolidated Statement of Cash Flows 145 Consolidated Statement of Changes in Equity 147 Notes to the Consolidated Financial Statements 216 Company Statement of Financial Position 217 Company Statement of Changes in Equity 219 Notes to the Company Financial Statements 235 Five year financial summary (unaudited) Colleagues 14,000+ 236 Shareholder Information Forward-looking statements forward-looking statements. These factors include factors such as economic and This document (including information incorporated by reference in this document), financial conditions generally in various countries and regions where we operate, the contains statements which are, or may be deemed to be, “forward-looking statements”. ongoing impact of the Covid pandemic on the global economy and on the holding of Forward-looking statements are prospective in nature and are not based on historical sports events, currency fluctuations, the behaviour of other market participants, the facts, but rather on current expectations and projections about future events, and are actions of regulators, changes in the political, social and regulatory framework in which therefore subject to risks and uncertainties which could cause actual results to differ Flutter will operate or in economic or technological trends or conditions, failure to materially from the future results expressed or implied by the forward-looking complete or successfully integrate acquisitions and the specific factors identified in statements. The forward-looking statements contained in this document include the discussions accompanying such forward-looking statements and in the Understanding statements relating to the financial condition, results of operations, business, viability and Managing our Principal Risks section included on pages 57 to 64 of this Annual Report. and future performance of Flutter and certain of the plans and objectives of Flutter and Other unknown or unpredictable factors could cause actual results to differ materially other statements other than historical facts. Often, but not always, forward-looking from those in the forward-looking statements. Such forward-looking statements statements can be identified by the use of forward-looking words such as “plans”, should therefore be construed in light of such factors. “expects” or “does not expect”, “is expected”, “is subject to”, “budget”, “scheduled”, None of Flutter or any of its associates or Directors, officers or advisers provides any “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, representation, assurance or guarantee that the occurrence of the events expressed or variations of such words and phrases or statements that certain actions, events or or implied in any forward-looking statements in this document will actually occur. results “may”, “could”, “should”, “would”, “might” or “will” be taken, occur or be achieved. You are cautioned not to place undue reliance on these forward-looking statements. Although Flutter believes that the expectations reflected in such forward-looking Other than in accordance with its legal or regulatory obligations, Flutter is under no statements are reasonable, it can give no assurance that such expectations will prove obligation, and Flutter expressly disclaims any intention or obligation, to update or to be correct. There are a number of factors that could cause actual results and revise publicly any forward-looking statements, whether as a result of new information, developments to differ materially from those expressed or implied by such future events or otherwise. Annual Report & Accounts 2020 Flutter Entertainment plc 1 Strategic report 2020 highlights* 2020 was a truly transformational year for Flutter as we attained unparalleled scale and diversification following completion of The Stars Group (“TSG”) merger. We increased our exposure to the fast-growing US market by accelerating our buy-out of the minority shareholders in FanDuel and we reinforced the Group’s balance sheet, positioning the Group well for future investment opportunities across our divisions. Net revenue (£m) Adjusted operating profit (£m) +28%2020 5,264 +18%2020 990 2019 4,144 2019 869 Adjusted EBITDA (£m) Adjusted EPS (pence) +16%2020 1,231 +19%2020 497p 2019 1,089 2019 416p Average monthly players Leverage ratio (net debt / adjusted EBITDA) +19%2020 6.4m 2.3x2020 2.3 2019 5.4m 2019 3.5 * All metrics presented are on a constant currency and pro forma basis. All metrics presented are also on an adjusted basis before for adjusting separately disclosed items. 2 Flutter Entertainment plc Annual Report & Accounts 2020 Strategic report Investment case Our unique investment case Market opportunity The global betting and gaming market generated c.£345bn of gross gaming revenue (“GGR”) in 2019, with just 13% occurring Global betting and gaming Current online online. As such the online sector has a long runway of growth market in 2019 share ahead of it with compound annual growth expected to be c.10% over the five years to 2024. While there are many exciting market £46bn opportunities to pursue, the rapidly regulating US market is arguably £345bn the most attractive for the Group and we have already established a leadership position in that market. Read more in our Market Review on pages 20 and 21 Revenue by product* Sports betting: 49% Diversified product Gaming: 28% Poker: 14% and geographic Retail: 4% offering Other: 5% The Covid pandemic has highlighted the resilience of our business model. Customer activity migrated from sports to gaming when sporting events were cancelled and performance was strong in regions where racing content was available, e.g. Australia. The diverse offering also helps to partially mitigate the potential 49+281445N impact of local regulatory change on the overall Group. Revenue by geography* UK&I: 41% Australia: 20% International: 26% US: 13% 41* Based on Group pro forma net revenue for+202613N the year ended 31 December 2020. Flutter’s combination with TSG completed on 5 May 2020. The pro forma numbers presented include TSG revenue for a full 12-month period. 4 Flutter Entertainment plc Annual Report & Accounts 2020 Scale Flutter is the global leader in online gaming. The online sector enjoys significant economies of scale through shared products and technology, which also enables continued investment in Increased product innovation. scale and flexibility to report Strategic invest Greater Enhanced Safer operating customer Gambling leverage proposition Higher revenue growth Track record of substantial 14%Total shareholder returns financial return 5 year CAGR Flutter has a long track record of robust financial performance with a compound annual growth rate (“CAGR”) in total shareholder returns of 14% for the five years to 31 December 2020. Read more in our Operating and Financial Review on pages 42 to 55 This is enabled by: 1. A strong portfolio of brands 3. People Our market leading brands in both mature and rapidly growing Our collegues are central to