2014 final results presentation
27 February 2015 James Henderson, CEO Neil Cooper, Group Finance Director
19 times Champion Jockey AP McCoy has announced his retirement in 2015. Small pictures, top to bottom: entering the parade ring on Carlingford Lough after winning the Hennessy Gold Cup during the 1 Hennessy Gold Cup Day at Leopardstown Racecourse, Ireland, February 2015; and on Binocular on his way to victory in the williamhill.com Christmas Hurdle Race, January 2011 Disclaimer
This presentation has been prepared by William Hill PLC (“William Hill”). This presentation includes statements that are, or may be deemed to be, “forward-looking statements”. These forward-looking statements can be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "anticipates", "expects", "intends", "plans", "goal", "target", "aim", "may", "will", "would", "could" or "should" or, in each case, their negative or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this presentation and the information incorporated by reference into this presentation, and include statements regarding the intentions, beliefs or current expectations of the directors, William Hill or the Group concerning, amongst other things, the results of operations, financial condition, liquidity, prospects, growth, strategies and dividend policy of William Hill and the industry in which it operates.
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2 2014: a record year
World Cup Retail Online Australia Other UK Non-UK 372.2 3% 3% 330.6 335.0 8% 6% 15% 18% 276.8 275.7 30% 32%
85% 82%
61% 57%
2010 2011 2012 2013 2014 2013 2014 2013 2014 £372.2m 40% 18% Record operating of net revenue from of net revenue from profit1, up 11% digital businesses2 international markets
1. Operating profit/loss is defined as pre-exceptional profit/loss before interest and tax, and the amortisation 3 of specific identified intangible assets recognised on acquisitions 2. Online and William Hill Australia Neil Cooper 2014 financial results
My Tent Or Yours ridden by Tony McCoy wins the williamhill.com Christmas Hurdle Race during Day One of the William Hill Winter Festival at Kempton Park Racecourse, December 2013
4 A year of record operating profit
52 weeks ended 52 weeks ended % Change 30 Dec 2014 31 Dec 2013 £m £m Amounts wagered1 8,945.7 7,800.8 +15% Net revenue 1,609.3 1,486.5 +8% Operating profit2 372.2 335.0 +11% Amortisation (9.0) (10.9) -17% Net finance costs (45.9) (44.3) +4% Tax (63.1) (32.2) +96% Non-controlling interest - (15.3) - Retained profit 254.2 232.3 +9% Basic, adjusted EPS (p)3 29.9 28.8 +4% Net debt for covenant purposes 602.8 796.0 -24%
Dividend per share (p) 12.2 11.6 +5%
Numbers are presented on a pre-exceptional basis. 1. Amounts wagered comprises the gross takings in OTC, Telephone, US, Australia and Online Sportsbook, and net revenue in Retail gaming machines and Online gaming products. 2. Operating profit is defined as pre-exceptional profit before interest and tax, before the amortisation of specific intangible assets recognised on acquisitions. 5 3. Basic, adjusted EPS is based on profit for the period before exceptional items and before the amortisation of specific intangible assets arising on acquisitions. Exceptional items
52 weeks ended 52 weeks ended 30 Dec 2014 31 Dec 2013 £m £m Accelerated Australian brand amortisation (44.5) - One-off shop portfolio closure (19.4) - European indirect taxation provision (9.7) - tomwaterhouse.com integration (3.3) (2.0) Revaluation of tomwaterhouse.com earn-out (2.2) - Write-off of unamortised finance fees (2.0) - Write-off of fees on bridge loan - (1.7) Australia management restructuring cost (1.8) - Repayment of VAT refund and interest (0.5) (5.6) Sportingbet acquisition and integration - (13.5) Pre-tax (83.4) (22.8) Release of tax provision 15.4 - Tax consequence of exceptional items 20.1 1.7 Post-tax (47.9) (21.1)
6 Retail gaming growth and strong cost control mitigate OTC margin decline
52 weeks ended 52 weeks ended % Change 30 Dec 2014 31 Dec 2013 £m £m OTC amounts wagered 2,452.2 2,439.9 +1% OTC gross win 449.7 472.8 -5% OTC gross win margin 18.3% 19.4% -1.1 ppts Machines gross win 461.8 440.0 +5% Total gross win 911.5 912.8 -0% Net revenue1 911.4 907.0 +0% Cost of sales (209.9) (203.3) +3% Gross profit 701.5 703.7 -0% Operating costs (508.3) (507.4) +0% Operating profit2 193.2 196.3 -2%
1. Adjusting for the Machine Games Duty effect, Retail net revenue was flat. 2. Operating profit is defined as pre-exceptional profit before interest and tax, before the amortisation of 7 specific intangible assets recognised on acquisitions. Retail OTC wagering and margin trends
Amounts wagered: H1 2014 v H1 2013 Gross win margin: full year trend
40% 35% 35% 30% 2014 2013 30% 20%
10% 25% 2% 0% 20% -3% -1% % Change in amountswagered -10% -5%
Horseracing Greyhounds Football Other Total 15% Retail gross margin win 10% Amounts wagered: H2 2014 v H2 2013 5% 4% 3%
2% 0%
0% 0% -2% -1% -1% -4%
% change in amountswagered -6% -5%
Horseracing Greyhounds Football Other Total 8 Retail gross win per machine shows good growth
52 weeks ended 52 weeks ended % Change 30 Dec 2014 31 Dec 2013 Average number of LBOs 2,406 2,401 +0% Average number of machines 9,458 9,431 +0% Machine density 3.93 3.93 - Gross win per machine per week £939 £897 +5% Machine gross win margin 3.44% 3.37% +0.07 ppts
Machine quarterly gross win growth 118 8.0% 117 7.0% 116 7.6% 6.0% 115 5.0% 114 4.0% £m 113 4.8% 4.3% 3.0% 112 3.3% 111 2.0% 110 1.0% 109 0.0% Q1 2014 Q2 2014 Q3 2014 Q4 2014
Gross win Growth % (2014 v 2013)
9 1. Compared with 52 weeks of 2012 Retail demonstrates good cost control
52 weeks ended 52 weeks ended % Change 30 Dec 2014 31 Dec 2013 £m £m Employee costs (195.2) (199.9) -2% Property costs (101.4) (102.8) -1% Content costs (70.2) (64.3) +9% Depreciation (29.5) (28.4) +4% Other costs incl. recharges (112.0) (112.0) - Operating costs (508.3) (507.4) +0%
Retail cost causal
1.1 (2.6) 510 5.3 8.6 507.4 0.3 (1.3) 508.3 508 (4.3) (7.0) 506 0.8 504 502 500 £m 498 496 494 492 490
10 Online revenue growth from both Sportsbook and Casino
52 weeks ended 52 weeks ended % Change 30 Dec 2014 31 Dec 2013 £m £m Sportsbook 253.3 212.9 +19%
Casino 235.5 191.0 +23% 2014 Online net revenue by geographic split Poker 14.9 18.2 -18% Bingo 23.7 24.2 -2% 17% Gaming net revenue 274.1 233.4 +17% 4% Net revenue 527.4 446.3 +18% 5% Cost of sales (51.0) (40.2) +27% 74% Gross profit 476.4 406.1 +17% Operating costs (298.7) (258.3) +16% UK Italy Spain Other Operating profit1 177.7 147.8 +20%
11 1. Operating profit is defined as pre-exceptional profit before interest and tax, before the amortisation of specific intangible assets recognised on acquisitions. Online wagering increased, pre-match margins weaker
52 weeks ended 52 weeks ended % Change 30 Dec 2014 31 Dec 2013 Unique active players (’000)1 2,467.9 2,360.7 +5% Revenue per unique active player (£) 213.7 189.1 +13% New accounts (’000)2 1,225.2 1,141.0 +7% Average cost per acquisition (£)3 107.8 107.4 +0%
Sportsbook amounts wagered (£m) 3,758.2 2,931.7 +28% - Pre-match amounts wagered (£m) 2,116.1 1,724.5 +23% - In-play amounts wagered (£m) 1,642.1 1,207.2 +36% Sportsbook gross win margin 7.6% 8.1% -0.5 ppts - Pre-match gross win margin 9.3% 10.0% -0.7 ppts - In-play gross win margin 5.3% 5.3% -
1. Placed a bet within the period 12 2. Registered and transacted within the period 3. Including affiliates Business expansion drives cost base expansion
52 weeks 52 weeks % Change ended 30 ended 31 Dec 2014 Dec 2013 £m £m Employee costs (53.0) (45.1) +18% Marketing (132.1) (122.5) +8% Finance charges (20.3) (16.6) +22% Depr. and amortisation1 (26.6) (18.9) +41% Other costs incl. (66.7) (55.2) +21% recharges Operating costs (298.7) (258.3) +16%
• Sportsbook free bets / amounts wagered ratio 0.8% • Marketing / net revenue ratio 25%
13 1. Excludes £1.3m of Online amortisation relating to acquired intangibles (2013: £4.0m) Doubling of Australian profit
52 weeks ended 41 weeks ended % Change Pro-forma local 30 Dec 2014 31 Dec 2013 currency £m £m change % Amounts wagered 1,388.7 1,177.1 +18% +0% Gross win 129.4 92.5 +40% +12% Win margin 9.3% 7.9% +1.4ppts +1.0 ppts Net revenue 121.9 86.7 +41% +11% Cost of sales (30.1) (20.2) +49% +19% Gross profit 91.8 66.5 +38% +9% Operating costs (67.1) (54.5) +23% -8% Operating profit1 24.7 12.0 +106% +121%
Unique active players (’000) 324.0 247.9 +31% +15% Revenue per unique active (£) 376.2 349.7 +8% -3% New accounts (’000) 142.1 95.9 +48% +4% Average cost per acquisition (£) 192.5 298.7 -36% -25%
14 1. Operating profit is defined as pre-exceptional profit before interest and tax, before the amortisation of specific intangible assets recognised on acquisitions. Good progress but Australian returns lag expectation
• Achievements to date – Systems upgrades – tomwaterhouse.com (TW) purchase and integration – Management restructure – Marketing mix rebalanced, CPA lowered
• Rebranding has commenced
• Headwinds – Currency – Race field fees
• Now expect returns of Sportingbet and TW taken together to exceed WACC by 2018 – Previous guidance of 2016, inclusive of TW – Earnings enhancing from 2014
15 William Hill US
52 weeks ended 52 weeks ended % Change Local currency 30 Dec 2014 31 Dec 2013 % change £m £m Amounts wagered 375.7 310.2 +21% +27% Gross win margin 7.9% 7.3% +0.6 ppts +0.6 ppts Net revenue 29.7 22.7 +31% +36% Cost of sales (2.5) (2.0) +25% +32% Gross profit 27.2 20.7 +31% +36% Operating costs (17.5) (15.8) +11% +16% Operating profit1 9.7 4.9 +98% +99%
16 1. Operating profit is defined as pre-exceptional profit before interest and tax, before the amortisation of specific intangible assets recognised on acquisitions. Strong cash inflows
52 weeks ended 52 weeks ended Change £m 30 Dec 2014 31 Dec 2013 £m £m Pre-exceptional EBITDA 438.0 390.3 47.7 Pension contribution (9.1) (8.1) (1.0) Exceptional cash (34.6) (16.0) (18.6) Working capital 47.1 (12.5) 59.6 Tax (34.5) (55.9) 21.4 Interest (43.6) (41.3) (2.3) Other 4.9 11.1 (6.2) Cash flow from operating 368.2 267.6 100.6 activities
• Cessation of non-controlling interest broadly offsets cash dividend increase, to £104m in total • Capex shortfall versus expectations (£75m versus £80-90m)
17 Capex
52 weeks ended 52 weeks ended 30 Dec 2014 31 Dec 2013 £m £m Retail development1 25.2 38.8 Online 35.6 31.9 Australia 5.8 2.8 US 2.2 2.6 Other (including IT) 5.8 8.5 Total cash capital expenditure 74.6 84.6
• Estate fell by a net 70 shops to 2,362 (52 openings, 14 closures, eight re-sites and 108 portfolio closures) • 2015 cash capex expected to be £80-90m • Exceptional provision of £12.4m relating to portfolio closure at year-end
18 1. Gross of proceeds on disposal Balance sheet supportive of strategic agenda
• Debt levels falling in 2014 – £180m debt pay down – £15m increase in cash in hand – Net debt of £602.8m on bank covenant basis at 30 December 2014 – Net debt/EBITDA at 1.4x against 3.5x maximum covenant (2013: 2.0x)
• Corporate financing activity through the year – Refinancing of existing revolving credit facility – New £540m five-year facility now in place
• As at 30 December 2014, the Group had balanced spread of debt maturities – Circa 90% of gross debt fixed, rather than floating – No debt maturity in 2015
19 Other finance matters
• Effective pre-exceptional income statement tax rate of 19.9% – Prior year rate, at 11.5%, benefited from deferred tax credit – Effective full-year income statement rate expected to be 19% in 2015, expected cash tax rate to be 20% in 2015
• Formal three-year actuarial pension valuation process completed – c£9.4m annual deficit repair payment to May 2019 – Accounting surplus, driven by reduced liability valuation and strong investment returns
• Dividend: 2014 2013 % Change
Interim 4.0p 3.7p +8.1%
Final 8.2p 7.9p +3.8%
Full 12.2p 11.6p +5.2%
20 James Henderson Performance and strategy update
AP McCoy winning the Connolly's Red Mills Horsecare Cubes Novices' Chase on Malt Master at Huntingdon, January 2013
21 2014 achievements in a record year
Mobile as % of Online net revenue
£m 600
500 • Another resilient Retail performance 400 30% 43% • Continued strong growth in Online 300 200 70% 57% • William Hill US operating profit up 98%1,2 100 0 2013 2014 • William Hill Australia operating profit1 doubles Desktop Mobile during period of substantial change +48% +117% • Good progress on responsible gambling measures growth in mobile growth in mobile Sportsbook gaming net revenue net revenue
1. Operating profit/loss is defined as pre-exceptional profit/loss before interest and tax, and the amortisation of specific identified intangible assets recognised on acquisitions 22 2. On a statutory basis Assessing the ‘black swan’ effect
While football margins are stable… …and accumulators are now a higher % of mobile1
Online pre-match betting gross win margin by calendar year
14%
13%
12%
11% 54% 61% 62% 10% 2012 2013 2014
…margins are affected by accas…
46% Online pre-match betting gross win margin by football season 39% 38% 30%
25% 2012/13 2013/14 2014/15 20%
15% Singles Accas
10%
5%
0% 2011/12 2012/13 2013/14 2014/15 to date Singles Accumulators Pre-match average
23 1. By amounts wagered on football during the UK domestic football season Substantial progress on responsible gambling
Implemented March 2014
Q4 2014 ASA, BCAP, CAP January 2015 April 2015 advertising reviews ‘Set Your Limits’ Launch of the concluded, voluntary is made mandatory £50 journey restrictions agreed
Launched Research published GambleAware Week October 2014 December 2014 January 2015
24 Regulatory update
• £50 journey to be implemented 6 April 2015 Online UK performance in H2 2014
• Point of Consumption Tax implemented Net revenue +29% December 2014 New accounts +7% • Consultations on the Horserace Betting Levy, Unique actives +17% contributions from offshore operators and possible replacement with a betting right Revenue per active +10% Cost per acquisition •4th EU Money Laundering Directive +4%
• Responses awaited on planning and advertising
25 Retail remains resilient
OTC turnover Retail gross win
4% 6% 9% Further technology 7% 17% enhancements • Video walls in 16% of shops 15% 46% 51% 14% 17% • Digital window display trial 4% 3% 6% 10% 4% 12% 8% 59% 52% 11% 25% • 5% CAGR in football turnover1 20% Continued product • 50% increase in SSBT football 2010 2014 2010 2014 evolution Horse racing Football Horse racing Football markets with Online feed Greyhounds Virtual Greyhounds Virtual • Eclipse in 70% of estate2 Other Other Gaming • B2 gross win +3%, B3 +11%3 Retail five-year financial performance (£m)
907.0 911.4 837.9 783.1 789.7 • Extended single manning successfully implemented Strong cost focus • Like-for-like rent flat in 2014 • Rolling onto CPI/RPI increases for content costs 2015-2017 204.5 196.8 211.5 196.3 193.2 • Closure portfolio benefits cost
progression 2010 2011 2012 2013 2014
Net revenue Operating profit
1. 2010 to 2014 26 2. As at 2014 year-end 3. Year on year Online leadership through innovation
Darts app
Cash In My Bet
Vegas app
AccaInsurance
Priority Access card
Vegas Mayfair games Product • Italy: Sportsbook and Casino iOS expansion: • Spain: Sportsbook and Casino horse racing •Darts Live Casino and • Vegas iPad scratchcards Product • Live Casino iPhone expansion: • Sportsbook, Casino, Vegas refreshes other
27 Online leadership through innovation
Darts app
Cash In My Bet
Vegas app
AccaInsurance
Priority Access card
Vegas Mayfair games Product expansion: horse racing
Live Casino and scratchcards Product • Launching shortly expansion: • By invitation only other • Priority access to the funds in your Online account
28 Online leadership through innovation
Darts app
Cash In My Bet
Vegas app
AccaInsurance
Priority Access card
Vegas Mayfair games Product expansion: horse racing
Live Casino and scratchcards Product • Extensive ‘Daily Meeting Markets’ range expansion: other
29 Online leadership through innovation
Darts app 62,606 39,392 Tennis events Cash In My Bet Football events covered, +6% covered, +19% Vegas app 17,015 138,419 AccaInsurance Basketball events Events covered in Priority Access card covered, +17% total, +11%
Vegas Mayfair games Further strong turnover growth in key products Product 41% expansion: 39% 39% horse racing 36%
Live Casino and 28% scratchcards 23% Product expansion: other
Football Tennis Basketball Pre-match In-play Total
30 Online leadership through innovation
Darts app £40m 1.2 million Cashed in on AccaInsurance free Cash In My Bet football in 2014/15 bets in 2014/15 season so far season so far Vegas app Extending Cash In My Bet AccaInsurance
Priority Access card
Vegas Mayfair games Product expansion: horse racing
Live Casino and scratchcards Product expansion: other
31 Online leadership through innovation
Darts app +68% growth in net Cash In My Bet revenue from proprietary Vegas Vegas app platform
AccaInsurance Priority Access +50% card growth in net Vegas Mayfair revenue from games Product Live Casino expansion: horse racing
Live Casino and scratchcards Product expansion: other
32 Strategic priorities: omni-channel
Maximising ‘One William Hill’ Customer-focused, multi-channel product technology-led share of wallet and content experience
54% 34% of Online’s regular of Retail’s regular customers regularly customers regularly bet in LBOs bet online
Online football Tip Advisor in Retail TV to US racing to Gantry content to Retail Online Online alignment SSBTs
33 Strategic priorities: international
US turnover US operating Australia operating Italy Sportsbook Spain Sportsbook ($m)1 profit1,2 ($m) profit (A$m)2,3 market share4 market share5
Other Others, 14% 7% 247 Bet365 Sportium Snai 28% 8% 150 7% 15.7 Paddy Power 45.1 Bet365 36 7% William Hill 46% 338 370 7.9 Sisal Lottomatica 19% 20.4 10% 174 -0.9 17.0 8% Bwin Eurobet 8% 9% 2012 2013 2014 2012 2013 2014 Bwin 2012 2013 2014 20% Retail Mobile William Hill 9%
US mobile Australia Palinsesto tomwaterhouse.com Live Casino turnover product Supplementare integration launch in Spain +65% expansion rollout in Italy
Australia Australia Net revenue: William Hill brand responsive design management Italy +39% launch change launch Spain +64%
1. 2012 numbers are on a statutory reporting basis from the date of ownership 2. Operating profit/loss is defined as pre-exceptional profit/loss before interest and tax, and the amortisation of specific identified intangible assets recognised on acquisitions 3. On a pro forma basis 34 4. Source: AAMS 5. Source: company estimates Strategic priorities: technology
RETAIL DISPLAY GAMING SPORTSBOOK UI MOBILE BETTING UI EXTERNAL GATEWAY TRAFALGAR FRONT END FRAMEWORK FRONT END WILLIAM HILL API (SERVICE LAYER) VEGAS HUB
CASINO, TRADING PRODUCT SECURITY COMMUNITY SETTLEMENT MONITORING BET CAPTURE POKER, BINGO CORE William Hill SYSTEMS TRADING
OpenBet ACCOUNT PAYMENT WALLET
Playtech DATA WAREHOUSE
BUSINESS INTELLIGENCE
Increased Flexible Ring-fenced front-end 700 framework: £98m back-end independence: people in IT William Hill API, IT opex and solution Project Trafalgar team globally Central Feeds capex in 20141
35 1. Excludes depreciation and amortisation Summary
• Record 2014 performance
• Continued strong Online growth
• Underpinned by cash-generative Retail
• Good operating profit progress from US and Australia
• Clear strategy for continued digital and international diversification
36 1/5 Hung Parliament 4/1 Conservative-Liberal Democrat coalition 9/2 Coalition involving SNP 9/2 Conservative minority government 5/1 Labour minority government 11/2 Conservative majority 11/2 Labour-Liberal Democrat coalition 7/1 Coalition involving UKIP 9/1 Labour majority 20/1 Coalition involving Greens 33/1 Conservative-Labour coalition 50/1 UKIP majority 37 500/1 Liberal Democrat majority APPENDICES
38 Performance by division
Net revenue1 Operating profit2
52 weeks ended 52 weeks ended % Change 52 weeks ended 52 weeks ended % Change 30 Dec 2014 31 Dec 2013 30 Dec 2014 31 Dec 2013 £m £m £m £m Retail 911.4 907.0 +0% 193.2 196.3 -2% Online 527.4 446.3 +18% 177.7 147.8 +20% Telephone 11.8 16.5 -28% (0.8) (0.0) n/a William Hill Australia 121.9 86.7 +41% 24.7 12.0 +106% William Hill US 29.7 22.7 +31% 9.7 4.9 +98% Other 7.1 7.3 -3% (0.1) 0.2 -150% Corporate - --(32.2) (26.2) +23% Total 1,609.3 1,486.5 +8% 372.2 335.0 +11%
1. Group, Retail and gaming machine net revenue growth is flattered by the transition from VAT and Amusement 39 Machine Licence Duty to Machine Games Duty on 1 February 2013. 2. Operating profit is defined as pre-exceptional profit before interest and tax, before the amortisation of specific intangible assets recognised on acquisitions. Net operating expenses by division1
52 weeks ended 52 weeks ended % Change 30 Dec 2014 31 Dec 2013 £m £m Retail (508.3) (507.4) +0% Online (298.7) (258.3) +16% Telephone (12.5) (16.5) -24% William Hill Australia (67.1) (54.5) +23% William Hill US (17.5) (15.8) +11% Other (6.3) (6.2) +2% Corporate (33.2) (29.6) +12% Group net operating expenses (943.6) (888.3) +6%
1. Numbers are presented on a pre-exceptional basis, excluding the amortisation of the specific 40 intangible assets arising on acquisitions and net of other income. Telephone
52 weeks ended 52 weeks ended % Change 30 Dec 2014 31 Dec 2013 £m £m Amounts wagered 212.2 252.0 -16% Gross win 12.6 17.4 -28% Gross win margin 6.0% 6.9% -0.9 ppts Net revenue 11.8 16.5 -28% Cost of sales (0.1) (0.0) - Gross profit 11.7 16.5 -29% Staff costs (1.0) (1.7) -41% Marketing costs (2.3) (2.4) -4% Other costs incl. recharges (9.2) (12.4) -26% Operating costs (12.5) (16.5) -24% Operating (loss)/profit1 (0.8) 0.0 -
41 1. Operating profit is defined as pre-exceptional profit before interest and tax, before the amortisation of specific intangible assets recognised on acquisitions. Net finance costs
52 weeks ended 52 weeks ended 30 Dec 2014 31 Dec 2013 £m £m Interest receivable (1.0) (1.1) Bank loan interest 6.5 10.6 Bond interest 37.2 30.4 Amortisation of finance fees 2.6 3.7 Net interest on pension scheme net liability 0.6 0.7 Total pre-exceptional net finance costs 45.9 44.3
42 Net debt for covenant purposes
As at 30 Dec As at 31 Dec 2014 2013 £m £m Bank loans 50.0 230.0 Corporate bonds 675.0 675.0 Cash (222.1) (206.7) Net debt 502.9 698.3
Obligations under bank guarantees 3.2 3.0 Restricted cash – client balances 89.7 85.8 Other restricted cash 7.0 8.9 Net debt for covenant purposes 602.8 796.0
• Net debt: EBITDA of 1.4x vs maximum covenant of 3.5x (31 Dec 2013: 2.0x) • EBITDA: Net cash interest of 10.4x vs minimum covenant of 3.0x • BB+/Ba1 stable outlook credit ratings from S&P/Moody’s
43 Australia performance in local currency (pro forma)
52 weeks 52 weeks ended % Change ended 30 31 Dec 2013 Dec 2014 A$m A$m Amounts wagered 2,542.9 2,530.3 +0% Gross win 236.7 211.0 +12% Win margin 9.3% 8.3% +1.0 ppts Net revenue 223.0 200.5 +11% Cost of sales (55.2) (46.5) +19% Gross profit 167.8 154.0 +9% Operating costs (122.7) (133.6) -8% Operating profit1 45.1 20.4 +121%
Unique active players (’000) 324.0 282.1 +15% Revenue per unique active (A$) 688 711 -3% New accounts (’000) 142.1 136.8 +4% Average cost per acquisition (A$) 351.9 467.8 -25%
44 1. Operating profit is defined as pre-exceptional profit before interest and tax, before the amortisation of specific intangible assets recognised on acquisitions. US performance in local currency
52 weeks ended 52 weeks ended % Change 30 Dec 2014 31 Dec 2013 $m $m
Amounts wagered 617.3 487.6 +27% Gross win 48.6 35.8 +36% Win margin 7.9% 7.3% +0.6 ppts Net revenue 48.6 35.8 +36% Cost of sales (4.1) (3.1) +32% Gross profit 44.5 32.7 +36% Operating costs (28.8) (24.8) +16% Operating profit1 15.7 7.9 +99%
45 1. Operating profit is defined as pre-exceptional profit before interest and tax, before the amortisation of specific intangible assets recognised on acquisitions.