888 Holdings plc

Good morning, everyone, and thanks for joining us today for our 2024 results. I am Per Witteström, and I'm joined today by Sean Wilkins, our CFO. I've been CEO of Evolve for nearly 18 months now, and in today's presentation, I'm delighted to report on the strong progress we are making with our business transformation and turnaround. We start with the agenda on slide two, and while we already gave you the key headlines on 2024 performance and our full year trading update in January, I'm pleased to say that our adjusted EBITDA was actually two million pounds ahead of the top end of our previous update. I'm delighted to report we met or exceeded our commitments from the interim results, and Sean will talk through the details of this, as well as covering our current trading and outlook for the year ahead. I will then cover our strategic progress and how we are executing gains that value creation plan before taking your questions. Turning to slide 3 with a reminder of our commitment to shareholders to create the value that we laid out exactly a year ago today. Firstly, driving growth. We have made great progress focusing the business towards our five core markets, which now make up 90% of our revenue. The business is powered by these market leading positions, which deliver strong, sustainable and profitable growth and support our confidence in achieving our 5% to 9% revenue growth targets. Secondly, we are improving operating leverage. Our adjusted EBITDA margin was 22% in the second half of 2024. While we expect this to be more like 20% for full year 25, we are on the positive upwards trajectory and continue to see significant long-term upside to our profitability as we build our enhanced capabilities. Thirdly, we are highly disciplined with our capital and use of cash and are committed to reducing financial leverage in the coming years, accelerating return on equity for our shareholders. Turning to slide four, and just before handing over to Sean to cover the financial results in more detail, I would like to give my personal highlights of my first full year as CEO. Firstly, and perhaps most importantly, we returned the business to growth for the first time in three years. We delivered full-year revenue growth of 3%, with growth in the second half of 8%, consistent with our mid-term target of 5% to 9%. We further improved the mix of the business during the year. The acquisition of Winne created our fifth core market in Romania, and online core markets grew 12% year over year. The business is powered by these market leading positions, which will continue to underpin our strong, sustainable, and profitable growth. We transformed almost every area of the business with a complete reset and transformation, bringing in new talent and laying the foundation for significantly enhanced capabilities going forward. The strategy is working and we are pleased with our progress, but we know there is a lot more to do. But laser focus on execution as we strive to deliver our exciting potential and create value. Sure, we now cover the financial results.

Thanks, Per, and good morning, everyone. I'm Sean Wilkins, the CFO, and I've now been with the business for just over a year. As you can see on slide six, for the full year, our revenues were up 3% and adjusted EBITDA was up 4% to £312 million. It's worth just pointing out here for the eagle-eyed that the fiscal 23 EBITDA of £300 million is £8 million lower than what was reported last year. due to an accounting adjustment on a UK gaming duty where it had been under accrued. On the face of it, you'd be forgiven for thinking that this was quite a pedestrian year, but the full year figures alone don't tell the story of the radical transformation that we were undertaking during the year. A transformation that drove significantly better performance in the second half and has positioned the business for both stronger revenue growth and higher profitability in the future. Revenue in the second half was up 8% year over year, including 12% growth online with double digit growth in Q4 across both UK and international online. In UK online, we returned the business to strong growth in the second half and gaming for the full year was up 9%. At an EBITDA level, the significant increase in marketing in half one last year did not generate the desired returns as we've discussed previously. Our international business delivered fantastic operating leverage with 7% revenue growth alongside a reduction in both marketing and other operating costs as we refined our brand marketing plans and improved efficiency. This led to an adjusted EBITDA growth of 31%. We saw the opposite effect of this in retail where the high proportion of fixed cost meant EBITDA declined by 33%. With a new management team and improved gaming offering, we are confident the business is much better placed in 2025. In the appendix to this presentation, there are some more slides on the reported results, including details of the exceptional items and adjustments, being mainly the purchase price allocation amortization, integration costs, and the US termination fees already disclosed. Turning to slide seven, this chart really highlights the extent of the transformation the business has been through. We are now really well positioned with 90% of our revenue coming from core markets and 96% from regulated and taxed markets. Within our core markets, we have strong positions and the right brands and products to grow share, supporting our 5% to 9% revenue growth plans. The mix of revenue and quality of the business has improved significantly over the last three years, reflecting a few factors which you can see in the chart. Firstly, our UK revenues are lower. This reflects the proactive change in brand strategy to reduce investment in low margin business and focus on investing in profitable growth. It also reflects a mixed shift within the player base to more sustainable customers, as we have implemented nearly all of the actions from the government white paper in the UK. Secondly, there are a whole range of markets like the Netherlands, Middle East and Latvia, where we have either closed, sold or totally restructured the way we operate. These markets made up 14% of the 2021 pro forma revenue and are now under 5%. Thirdly, in the rest of the world, which is a mixture of dot-com and locally licensed, we have changed the focus to drive sustainability. And finally, in our other core markets, revenues have increased by approximately £100 million, or 36%, reflecting our market focus and the strength of our leading brands and products in these attractive markets. The net impact of all these changes is that we now have a really strong business mix with 90% of our revenues coming from our core markets, where we have market-leading positions and support our sustainable 5% to 9% revenue growth plan. Turning to slide eight, I'm delighted to report that we have met or exceeded all our commitments from the interim results. In August, we outlined that we were disappointed with the financial performance in the first half but have taken bold, decisive actions to correct this and drive a stronger performance in the second half. This chart compares half one 2024 adjusted EBITDA to half two and progress against all of the key areas that we discussed at the interim results. As you can see, we beat the top end of our guidance range with revenue growth towards the top end of the range alongside overachieving on cost savings. Turning to slide nine, while we delivered efficiency gains in 2024, I am pleased to say there is a lot more to go for. As Per highlighted, the central pillar of our value creation plan is to become more efficient as a business, delivering higher profit margins as we achieve sustainable revenue growth. The business already successfully achieved £150 million of synergies from the combination. which offset some of the significant regulatory and compliance headwinds I've already mentioned. Per then announced a 30 million pound cost optimization program soon after he became CEO, which was successfully executed in half one last year. In addition, as I've just laid out on this previous slide, we executed a further 15 million pounds of cost saving actions in half two. Not all of these will annualise, but we do expect to be able to drive 15 to 25 million further savings in 2025 from further operating model refinements, as well as supplier efficiencies. This drive for efficiency will continue, particularly where we see cost headwinds, such as the national insurance and national living wage changes in the UK, which are around a 10 million pound headwind this year, that we have been able to absorb into our existing guidance through additional efficiencies. Turning to slide 10 and our cash flow. Net cash, excluding customer balances, increased by £19 million in the year, although we used £85 million of the RCF at the end of the year, resulting in net debt increasing by £30 million to £1.79 billion. Cash burn for the year of around £65 million was primarily driven by exceptional cost to deliver on the transformation, coupled with the poor first half performance. You may recall at the interims I said that we expected to be broadly cash neutral over H2 and the eventual outflow of a little under 30 million was primarily driven by M&A timing, with the winner acquisition not factored in at the time and a delay to the sale of USB2C. On an underlying basis, we were around neutral. The leverage multiple dropped 0.2 times on a full year basis to 5.7 times and we made strong progress from the interims. with LTM leverage reducing by one time from 6.7 times over the second half. Looking into our trajectory for this year, we expect continued rapid deleverage with the multiple expected to be around five times by year end. As we look forward, the group had previously guided to net leverage below 3.5 times by 2026. We now expect to meet this target in 2027. primarily reflecting the additional time needed to build out world-class capabilities, alongside the further exceptional costs and capex required to execute such a significant transformation in the business. While leverage is high, the resilient business model and significant cash generation ensures we comfortably cover our debt servicing demands. We are on a clear path to de-level the business and support a high return on equity. Turning to slide 11, a quick update on my financial priorities that I outlined at our 2023 full year results. Firstly, we're driving and embedding a cultural shift in the mindset to deliver value creation. We have built much better ongoing tracking and reforecasting to ensure we are delivering. This enables the business to take corrective action if we are off course and to quickly scale up or scale down investments. Secondly, resource allocation is fundamental to creating value. We have sold businesses in non-core countries such as the USA, Latvia and Colombia, and are highly selective in our capex and MA investments, such as our low-capital, high-impact partnership with Winner in Romania. Thirdly, we are making strong progress with our efficiency and operating leverage. As I mentioned before, we have identified further cost savings for 2025. And in parallel, we are investing in our strategic initiatives to deliver a step change in capabilities and productivity. Turning to slide 12 with some comments on current trading and our outlook for the year. I am pleased to say that following a robust start to the year, we're comfortable with our annual revenue growth guidance of five to 9%. We're likely to be a touch below this in Q1 for a number of reasons. Firstly, short-term impact of new customer journeys as part of additional safer gambling measures introduced at the end of Q4 in UK online. But these have been mitigated with the implementation of improved product and customer experience, which will reduce the impact going forward. Secondly, the prior year had elevated marketing and promotional activity. Thirdly, strong wind margins in Q4 and racing cancellations in January have impacted volumes into Q1. And finally, last year had one extra day, which is worth one percentage point for the quarter. The exciting product pipeline, the improvements in retail, the full implementation of the Customer Value Proposition, or CVP, for William Hill, and our ever-improving capabilities around data and personalisation are all driving our confidence in Q1. and being in the 5% to 9% range for the full year. Importantly, though, we continue to evidence the step change in profitability and expect the Q1 adjusted EBITDA to be £18 to £28 million higher than last year, with LTM EBITDA expected to increase to around £330 to £340 million at the end of Q1 2025. This should step up again through the year as we deliver our plans with an expected margin of at least 20%, which supports an expected significant step down in leverage this year. I'll now hand back to Per to provide some more details on our strategic progress last year and the plans for this year.

Thanks, Sean. Turning to slide 14 with a quick reminder of how we're going to deliver the value creation plan and our strategy to execute on this. The detailed strategic framework is in the appendix, but this slide summarizes what it means across the key areas of what we will do, how we will do it, and where we will do it. Over the following slides, we'll bring each of these to life a bit more, but I just want to start by reiterating again, this has been a complete reset of the business. We have built a clear and compelling strategy, We have built an almost completely new team who are highly motivated and incentivized to deliver this plan. We have a new modus operandi and ways of working across the business. We know where to invest in our core markets, and we know how to invest and how to win customers in these markets. The strategy is working, and while there is, of course, a lot still until this business is performing the way it should and can do. But I'm really pleased with the progress we have made here. Turn to slide 15, and while Sean has covered a lot of this already, I wanted to start with the evidence of what we are doing. I'm delighted to say that we returned the business to growth during 2024, and our strategy reel has been beginning to pay off, with H2 2024 delivering year-on-year revenue growth of 8% and adjusted EBITDA growth of 29%. As Sean outlined, the shape and mix of our business is very different today compared to just three years ago, with a significant increase in the quality and sustainability of our revenues. Our core markets enjoy leading market positions powered by our world-class brands. These strong market positions support our plans for 5% to 9% annual revenue growth in the coming years. In terms of profitability, the designs and actions we took last year to improve performance have had a positive impact. In particular, on the cost side, and as you see here, we delivered a significant improvement in margin in the second half to levels this business has not seen for years, and with a significantly higher regulated revenue mix as well. This focus on profitable growth delivered a significant leveraging in the second half. As Sean mentioned on current trading, with the last 12 months EBITDA having improved again, we are already bringing leverage down so far in 2025, and we remain laser focused on bringing leverage down quickly and consistently to have a new target of under 3.5 times by 2027. Turn to slide 16 and to focus on the first of our core competitive advantages, operational excellence driven by data insights and automation. This slide has just a few highlights from the developments during the year. We have hired a truly world-class AI and talent automation team who have significant experience in delivering large-scale transformation, and we are investing in the right tools. We've had some quick wins across customer operations and trading, building on a lot of good automation work that was already happening, but there's significantly more to go for in 2025 and beyond. Earlier, the evidence of our improved use of data insights can be seen in our more efficient use of bonuses and free bets. We have become much better at segmenting our core customers, which together with improved products and customized second management has enabled us to drive better personalization and ensure we are spending on the right customers. This has also helped drive a substantial increase in RPU, being up 6% for the year Turning to slide 17, our second competitive advantage being invested into is our winning culture. We rebranded the group as Evoke, a critical step to bring together our business into one company, focused on execution of our strategy. We have an almost entirely new executive team bringing in leading talent experience from inside the sector and outside, as well as strengthening the wider the leadership community. We have radically restructured and reshaped the operating model, removing layers and broadening spans of controls, getting our people across the business closer to the customer, and speeding up decision making. We made sure we support the colleagues through such a large transformation, including significantly expanding the well-being support we offer, including funded sessions with coaches across a wide range of topics, We still have more to do in this area, but it's pleasing to see the improvements in employee NPS across the second half of the year from plus 4 to plus 10 as they really embed the new strategy. Turning to slide 18, our third competitive advantage we are investing behind is our leading distinct brands. We have relaunched Mr. Green as the most distinctive casino brand in the market. We are repositioning William Hill and have just launched our new visual identity in March, ahead of the Cheltenham Festival. And we have begun the detailed work on 888 now as well, which will launch in 2025. All of this work is designed to develop and deliver a clear and consistent customer value proposition, giving customers a reason to choose us to stay as a loyal customer. We're becoming much more sophisticated in our segmentation and we are striving for infinite personalization to become the brand of choice in all our core markets. On the product side, we fundamentally overhauled the entire product and tech function and development pipeline. This has enabled improved speed to market with new features, with some particular highlights for the year being the new bet builder product and impact sub feature, both of which are resonating really well with customers. And we are the only operator offering impact sub features in retail. Also, in retail, we began the rollout of our new gaming cabinets with 5,000 installs now complete and positive early signs with accelerating growth performance and market share gains in Q1. We continue to progress the move towards a single platform with William Hill's trailing engine, now integrated into the 80-day platform. All Mr. Green markets now migrated onto the 80-day platform, and Section 8 can roll out onto William Hill and Mr. Green. We have loads of exciting products to come in 2025 as well, alongside a continued drive to simplify the UX and improve ease of use. I hope you were all using the William Hill app at Cheltenham. If you were, you would have seen our new improved horse racing pages. That's just another example of this. Turning to slide 19, alongside our investments in capabilities and competitive advantages, we've been highly disciplined about investing where we can deliver best returns for our shareholders, which is our five core markets, the UK, Italy, Spain, Romania, and Denmark. As you can see on the slide, we have really strong positions here. And in the markets where we are outside the podium positions, we are really close to the top three positions. there is a bigger gap given a significant consolidation that's happened there in the recent years. However, we are a top three online casino operator in Italy. These are all large, attractive and growing markets with high barriers to entry. Our strong positions here and our clear market focus helps us to deliver our 5% to 9% revenue growth target and builds us a more focused and more profitable business. Finally, on slide 20, with our conclusions before taking your questions. 2024 was a full transformation and reset. We started to see the impact of this with the business return to growth after two years of declining revenue. As well as improving short-term trading trends, we have been investing heavily behind our strategy, focusing our resources on our core markets and investing in our long-term capabilities. who are well-placed to deliver our commitments with 5% to 9% revenue growth and at least a 20% EBITDA margin in 2025, leading to material deleveraging. Finally, just before we hand over to Q&A, I wanted to take a moment to say that on behalf of the board and the whole team at DeVoke, I would like to thank Vaughan Lewis, Chief Strategy Officer, who will leave the business in the summer of 2025 Born has played a very important role in many aspects of the business over the past four years, including helping to deliver the transformation acquisition of William Hill, assuming the role of interim CFO prior to Sean's arrival. playing a critical role in developing our value creation plan and deliver the value added M&A, such as the positional winner and the development of the group's 888 Africa joint venture. With the business returned to growth and the group's value creation plan in place, Warren has decided the time is right to seek new opportunities and that we wish him every success in the future. With that, I will say thank you for your continuous support, and we are now ready to take your questions.

Ladies and gentlemen, if you would like to ask a question over the conference call today, please signal by pressing star 1 on your telephone keypad. Again, that is star 1 for your questions today. And first up, we have Estelle Weingraud from J.P. Morgan. Please go ahead. Your line is open.

Hi, good morning. Thanks for taking my questions. The first one, can I ask on the building blocks to get to your 5% to 9% NGR growth this year, and more specifically on how you see this evolve sequentially? So Q1 is low single-digit. Q4 comms this year are also quite challenging, so just to understand better the pace. Also, I mean, in Just to come back to Q1, I mean, some of your peers have flagged a relatively stronger start to the year in the UK. And we understand that Cheltenham was relatively operator-friendly overall. So I would like, again, to understand a bit better what's happening here for Q1 here for you. And then just the last question would just be to understand a bit better the additional investment triggering your leverage target to be postponed by a year to 2027. Just trying to understand a bit better what this will consist in. Thank you very much.

Thanks, Estelle. Let me take the second question first, so explanation of Q1, and then I'll go into the building blocks the rest of the year and the additional investments after that. So Q1, we had the short-term... impact of safer gambling measures as the first impact. So we were looking at customer journeys and we introduced particular aspects around customer safety over Q4 and Q1 this year. I think the second thing was prior year, as we talked about before, had elevated marketing and bonusing. Now, we've discussed many times before the fact that we didn't we didn't particularly achieve the return on investment that we expected on that. But it did drive some revenue growth then. So we were lapping that. The third thing we had was bookie friendly results in Q4 24. So customer wallets were a bit empty coming into Q1. The fourth thing we had was racing cancellations. So there were a number of racing cancellations. Basically, there wasn't really any racing for a couple of weeks in January. And then the last thing was, you know, there was one day less in Q1, and we think that that's roughly one percentage point of growth when you look at it on a quarterly basis. It is important at this point to point out that we did have extremely good EBITDA growth. So our EBITDA LTM we saw was up to 330 to 340 million, or expect it to be 330 to 340 million by the end of Q1. So just turning to your second question, what the building blocks that we expect to get us back on track for the rest of the year. The first thing to say is we've got improvements in product. I mean, we had an exciting product roadmap last year. We delivered BetBuilder amongst a number of other products as well, which all drove growth last year. And we've got a great product roadmap going forward with exciting new features coming in. We've got improvements in retail, so we committed to get our new gaming machines rolled out before the end of Q1. We actually did it before Cheltenham, and that's been driving good performance in retail, amongst other things, actually, which we'll probably talk about later. We've got the full year of William Hill brand CVP. So, you know, whereas in the past we've been a bit haphazard in our marketing, we've got a very unified message going forward, all guided by the CVP, which is gaining traction. And then probably the most important of them all, we've got customer lifecycle management capability, improvements coming in over the course of the year and, you know, towards the end of last year. Turning to the investment question on why leverage has been moved out by a year. I think there's two major aspects here and focusing in on 2025 as a good example. We've moved out £100 to £110 million. The things that are driving that, firstly, we're investing in our retail estate. That includes refurbishment, amongst other things. We're investing in AI and the other strategic initiatives. And we're investing in product in the online business. So those things are driving CapEx up. And then I think there's additional exceptionals. We announced that we're aiming at 15 to 25 million cost efficiencies over the course of this year. And of course, that's got an additional CTA cost to achieve associated with it. And that additional CapEx and those additional exceptionals are pushing out our targets beyond the 3.5 to the end of 2027.

Okay, thank you very much. And just about the, how should we look at the sort of sequential acceleration of the NGR growth in the next quarter? Just sequentially because of, you know, like the Eurocomps and the Q4 last year was very strong. So I guess Q2 and Q3 should be the two quarters driving the performance.

Yeah, I think when you look at the comps, you know, Q4 growing at 12% is a difficult comp. But having said that, All of the initiatives that I talked about that are driving our confidence in the 5% to 9% growth all accumulate during the year. So customer lifecycle management is a cumulative thing. As we bring in new customer lifecycle management initiatives, they accumulate over the course of the year. So we're not scared of the comp that we've got in Q4, but equally, you're quite right that Q2 and Q3 are easier comps.

Great. Thank you very much.

Thank you. And as a reminder, that is star one to ask questions over the conference call today. We'll pause for a brief moment. There appears to be no further questions from the call at the moment. So I'd like to hand over to you Tilly to take questions via the webcast.

Thank you. So we've got a few questions from Ivor from Peel Hunt. First question. Is retail growing in Q125 as well as taking market share?

So thanks for that question. So I'm very encouraged with what I am seeing and what we are seeing when it comes to retail. To start with, we have stepped up the leadership behind the hugely important retail channel for William Hill in the UK. We have a new managing director that started in September. And he has already identified some great short-term improvements and actually already started the action upon them with much more in the pipeline. To be very clear, it's all about becoming competitive again. It's absolutely clear that over the years, William Hill on the high street has fallen behind, both when it comes to gaming machines, but also the in-store experience from a customer perspective. So we have planned significant further improvements to the customer offering during 2025, be it in terms of increased digitalization, improved self-service betting terminals product experience, additional TV content, as well as, as was alluded to by Sean, a very selective store refurbishment program Important is also to highlight the new gaming machines that has been completed in terms of the rollout before Cheltenham. 5,000 new fantastic machines has been rolled out before Cheltenham. And we do see early, very early, very positive customer response to the new stepped up proposition. And we see that in terms of now improved in terms of revenue. And we are also taking share now as we speak in the gaming segment in retail. So I think it's fair to say that we are resetting the retail channel. I'm very proud of what we are doing, and it's a very important part of our omnichannel approach.

Thanks. Next question from Ivor is net debt EBITDA will not be at 3.5 times at the end of FY26. What will it be and how big a shift is this?

So thanks, Ivor. So just a reminder of where we've been. At half 1.24, we were at 6.7 times. At the end of 24, we're at 5.7 times. With the expected EBITDA LTM that I saw, that I mentioned just now, for Q1, I'm expecting Q1 to be 5.4 or even 5.3 times. So we're on a very strong de-levering trajectory. I think I also said in the presentation that I expect leverage to be under five by the end of 2025. And we've also said under three and a half by the end of 2027. And you could expect either for it to be reasonably straight line between that data point of the end of 25 and the data point at the end of 2027.

Thank you. Ivo's next question is, you have told us the revenue from non-core. What is the contribution as a proportion of the total?

So thanks again, Ivor. So we haven't sent out any information on this this year, but we have done in the past. And it would be fair to say that contribution percentage from non-core largely reflects revenue percentage from non-core. So it would be a rule of thumb to just follow the revenue percentage from non-core.

Thanks. Last one from Ivor is, Did under accrual of FY23 gaming duty benefit reported FY24 results?

Well, no. So the point here is that we had a good look at gaming duty. We realised that when under accrued, we put a prior year adjustment in for the prior year. Of course, having realised that, we made sure that both the accounting and the cash for 24 was correct.

Thank you. Next question comes from Richard from Deutsche Numis. Current trading, additional safer gambling measures introduced. Does that include £5 maximum online stake across your brands or is that to come later in the year?

So the additional safer gambling measures that we introduced in Q4 and through Q1, which is basically part of the way that we do business, we're continually looking at our player safety and we look at it through the customer lifecycle management lens. So that's what I was referring to there. It doesn't include the change to slot limits, which we're expecting in May. But it would be fair to say that we have, you know, some time ago adopted the limits that were expected to be introduced in May. So that is for us really a non-event. We don't really expect any impact on the business from that.

And just to add in terms of when it comes to the additional safer gambling measures that we introduced, as Sean said, it is an integral part of how we are design executing on, as we say, customized cycle management, i.e. the customer journey. And as we are becoming more sophisticated, for example, when we're looking at the markets of harms that are giving us indication of the potential harm, related to gaming. We are obviously becoming much more personalized in the way we are interacting with each of the customers along the journey. And this is an example of that, that when we look at the marks of harms, how we are becoming more sophisticated, how to act on the behavioral metrics that are landing when we look at the data and then how I then introduce those interactions with the customers across the journey. It's fair to say that we addressed that and have done that on a continuous basis. But looking at the product roadmap we had, we have a few more coming in in Q4. We clearly have learned in terms of some of the friction we identified based on customer feedback. But to be very clear, those feedback from the customer that are highly valuable, we are addressing as we speak. And that is also what Sean was alluding to in terms of the Q2 and onwards. The product features, the channel features coming in is addressing how to ensure further customer non-friction experience when it comes to the journeys.

Thank you. Now the question from Richard is, what do you expect sports net revenue margin in first quarter 25 versus first quarter 24?

Well, so there is an inbuilt slight increase from year to year, which comes from both customer mix and product mix. But other than that ongoing trend, we haven't made any other public announcements about that.

And if I can just add to that, because we are addressing some underlying fundamentals when it comes to the composition of the expected margin over time, it was in terms of the balancing of the customer mix. um that's number one the way we are we have stepped up in in the 2024 will continue to do so when it comes to a great product offering towards multiples so for example now the bet builder as an example the way we promote those great products which is also integrating higher margin over time And so, and I think finally, but not least, is that we have stepped up the leadership when it comes to the way we trade, the way we manage the sports book. So by further improving the sports book trading and risk management capabilities as we're done with new leadership, of course, foresee to have a continued good effect on the way we are managing the book.

Thank you. And then the last one from Richard is, is there an update on other potential asset sales or exit of optimized markets, e.g. SIS?

So one of the features of the 24 cash flow was that we delayed the sale of the asset in the US. So we're expecting that to happen sometime over the course of, 2025, we always look at our optimised assets for potential value-added sales, but we're certainly not actively looking for buyers of assets at the moment. It's definitely opportunistic and it needs to be a fabulous return for us.

Thank you. Next question comes from James Weecroft from Jefferies and he's asking if It looks like you were back into market share gains in UK online gaming during Q4. Please can you remind us of the product improvements you've made to sports to accelerate growth through 2025?

Yeah, thanks, James. So, you know, the key ones that we talked about through last year were both BetBuilder, which was a product which we had on our online business, but we called it something else and actually renamed it BetBuilder and we actually gave it a much better customer experience. And then the other was impact sub, which means that if you've got a bet builder type bet, that your bet builder type bet continues if your if your player is substituted. So those two went down extremely well with our customers and also continue to drive revenue in the sports book.

Yeah, I guess I can add to that. I mean, we are double down on when it comes to the front end. And when it comes to the customer experience, we look at both in terms of racing and football. They have new pages in terms of racing, for example. I do hope, as I said in the presentation, that you use the William Hill app. new great pages when it comes to racing and the feedback from the customer has been extremely positive. So that is just a few examples of what we have done, but we have a very exciting pipeline for 25 to go.

Thank you. We've got a follow up question from Ivor. Sean said that net debt target was being pushed out because of exceptionals to reduce costs and to invest in retail refurbishments and AI in FY25. Why do these not pay off in FY26? And if they only pay off in FY27, why is the target not lower than 3.5 times in FY27?

So you're right, Ivor, that's why I said we've got the additional investment in exceptionals, but we've also got the additional investment in CapEx, which goes across retail and also the online business. They do have good payoff, but we're expecting to continue to invest in those through fiscal 26 as well. And when you do the maths, that comes to the fore. 27 3.5 times. I can go through the detail with you offline.

Thank you. Next question comes from Yulia from Algebras. You had a stronger HT performance. Do you believe this is sustainable growth or a result of sporting event tailwinds? If you believe this to be sustainable, can you outline why?

Yeah, sure. So thanks for the question. So we were quite clear, or we have been quite clear in announcements previously, that we did see good sporting results in Q4. But you'll also remember that we had the opposite effect in Q3, so particularly September. We had some pretty dreadful results, and that had quite a fundamental impact on the business. If you look at those in the round, in the hole for the half, they are largely neutral. So, you know, I would argue reasonably strongly that sporting results didn't impact our half two on the aggregate really at all. And therefore, yes, I think that, you know, the growth that we've driven in half two is sustainable. It is and it's product led as well, which is absolutely critical.

And if I just may add to that, if we look at the transformation that we are undergoing and with two lenses, I would say the first one is the short term training turnaround that I do believe that you can see now that we are back to the three quarters of consecutive growth. The strategy in the short term is indeed working. But also when we look at, is this profitable growth sustainable? I just want to say that we are absolutely adamant, obsessed about the current trading. We call it in the business as usual. But of course, then, as mentioned, we are investing into incremental value levers to drive incremental profitable growth. And I just want to state that again, that if we look at the way and what we invest into the customer proposition across the brands, The way we are now stepping up the customer lifecycle management, becoming much more automated, much more insights-driven. We are actually strengthening the leadership across the board, across all jurisdictions. The way we are stepping up now, the product and tech foundation, both online and retail, as well as how we're introducing now, you know, AI across the board. The question is, again, is this the sustainable profit growth? Absolutely it is. And that is why we absolutely add demand to deliver the value creation plan and guidance we have.

Thank you. Another one from Julia. Can you comment on the trend of your declining sportsbook stakes and increasing sportsbook margins?

So once again, if we look at the stakes and the margin again, so we have a fundamental shift again, as we said, when it comes to the customer mix. So we go for core high value, so value before volume. So we have the customer mix balancing that is more sustainable now than before, that of course will have an impact on the stakes and it has an impact on stake. But once again, when we look at this sportsbook, Marvin, and I mentioned that before, there are some important fundamentals that we are introducing. Now, on the back of a more sustainable customer mix, we have those fantastic, you know, multiple focus, multi-led product features, so like bet builder. We have promotions now that are focused again on those, I would call it, multiple focus-led sportsbook promotions. And the way we are then also addressing the customized hacker management in the combination of the product offering and the customer mix, of course, is helping us to build further fundamentals in terms of the predictability of the sportsbook margin going forward. And finally, not least, I reiterate that again, I talked about the improved capability, the leadership, and also the tool set that we are investing behind. The way we are managing the book, the trading, we have new leadership. The way we are dealing with the sports book management, including risk management, is a step up from where we have been before. So that will further inject further support to the sports book marketing going forward.

Thank you. I believe we've got a question on the conference call. So I'll hand back over to you.

Thank you, Tilly. Yes, we have a question from Richard Stuber from Deutsche Numis. Please go ahead. Your line is open. Sorry, my question has been answered on the conference. Thank you. Thank you. So back to you, Tilly, for further webcast questions. Brilliant. Thank you, Saskia.

Next question comes from Nigel. And he's asking, you mentioned shareholder value. However, debt has increased. Since you joined the SP, it's around 30% down. When will us longstanding shareholders actually see value in the SP and maybe a return to dividends?

So thanks for that question. So 24, you're quite right, we had a cash outflow. That was very much driven by the cost of the transformation of the business. You can see that evidence through the exceptional, which you can see on the cash flow slide. I think looking forward to 25, and perhaps Per, after I've talked about 25, can talk about the longer-term value creation that we're planning. But 25, from a financial perspective, we're absolutely driving strong EBITDA growth. And we do expect cash to be cash generative. you know, 20 to 30 million without, you know, notwithstanding gains on working capital. And of course, if you're growing the top line, you do expect to see gains on working capital. So EBITDA growth and cash generation in 2025 will create shareholder value.

I mean, just to add, I mean, being a shareholder myself and, you know, absolutely focused on together with the team to execute on the value creation plan. We are living and breathing value creation plan every day, which we should. And once again, the obsession we have about driving profitable revenue growth It's there every day. The way to ensure that we continue the margin expansion in terms of underlying profitability, we're also absolutely over that. And I think a testament for that should be the Q1 step change in terms of year-on-year underlying profitability growth. And of course, alongside with that, the uh the leveraging that we have been talking about i can just say that in the rest uh sure that being the ceo of this company it's a privilege of course to have opportunity to be part of this value creation journey but also as a shareholder you know we are absolutely adamant to to deliver substantial shareholder value over the value creation plan period

Thank you. That concludes the webcast questions. I'll hand over to you, Per, for any closing remarks.

Thanks so much. And I just want to take the opportunity to thank you, everyone, for your questions. And just to recap again, 2024 was indeed a transformational year as we launched our strategy. and the valuation plan. And we are making great progress against this as we've been communicating today. I'm truly excited what we're doing at this point in time and also what is going to come in 2025. And I can't wait to keep you up to date on the progress throughout the year. Once again, I would like to thank you all for your continued interest in our business and I wish you all a great day. Thank you so much.