Entain Plc

I'm joined here by Rob Wood, who is the CFO and the Deputy CEO. We've got Samir Deen, who's the Chief Commercial Officer. And at the end, we've got Sati Benz, who is the Chief Product and Technical Officer. We've also got quite a few of the management in the audience today. And hopefully at the end of the session, you'll have a chance to talk to some of us informally before you go. So really, let me get down to business, and I'm going to kick off with my reflections and thoughts, having been the interim CEO for nearly three months now. Then I'm going to give you a brief overview of the performance in 2023, but also looking forward to the priorities that we have in 2024. Rob will then take you through the financials, and then Samir and Sati are going to provide detail on what we've been doing. and what concrete actions we have taken with specific examples and what more we're going to be doing as we go forward. And then I'll wrap up and then we'll have an opportunity to do Q&As. So let me start with my reflections. Yes, I am an interim CEO, but I am definitely not a caretaker CEO. I am not here to tread water in any way, shape or form. We need momentum as a business. And I'm very much focused on execution. We are moving at pace. And my job, as I see it, is to hand this business on to the permanent CEO with great, positive operational momentum. And I'm very pleased to say that the recruitment process for the permanent CEO is going very well. I'm also pleased to say that we've added strength to our bench on the board. In the last two or three months, we've added Amanda Brown and we've added Ricky Sandler. And hopefully in the next week or two, we'll be able to announce the addition of yet one more board member. So the strengthening of the bench, along with the initiation of the Capital Allocation Committee, means that the Board's going to be able to look in depth at what other things we need to do to maximise and improve shareholder returns. Now, the Capital Allocation Committee was only set up very recently, so as I'm sure you hopefully will appreciate, it's not the timing for me to update any more on that because it hasn't reached any conclusions yet. If I now look into the business itself, I'm also really encouraged by the enthusiasm, dynamism of the management team that I've been working very closely with. And fundamentally, Entain is a strong business. It's working in an industry with strong growth dynamics. And our absolute focus under my watch is that what we're going to focus in on being who we are, and that is a betting and gaming company. Now, I understand the prior aspiration to move into broader interactive entertainment, but quite frankly, that was a distraction. We are laser focused on being 100% a betting and gaming company. And my style within the organization, which I think is important, is one of making it safe, although I am demanding, but making it safe to share the brutal truths, or what I like to call them, the elephants in the room. Because actually, if we face the elephants in the room, we can really, really get into proper debate, proper real change at real pace. So what are these elephants? Well, firstly, complexity. Complexity has gradually accumulated over time in this business. And that has been exacerbated by the fact we've done numerous acquisitions. And the problem with the complexity, it's hampering our agility and therefore our ability to get things done. So we have a great opportunity, I believe, to unlock the ways of working and drive more effective and more efficient outputs. In the US, we're very proud of the successes that we've had with BetMGM. And its performance, quite rightly, is a key focus for us. And where I like to think of MGM and ourselves, Entain, that we are the co-parents of BetMGM. But being fully transparent, it took us, and that is Entain, some time to realize just how quickly we needed to feed BetMGM with better consumer experiences and better, more focused U.S.-tailored products. Now, the good news, as Sati is going to tell you later on, is that the work that he and his team have done over 2023 have really helped BetMGM be much more competitive. And there is a lot more positive news to come in 2024. However, this all leads to another elephant in the room. Delivering product and tech solutions for BetMGM at the pace that we have had to do it has meant there has been some considerable cost in our other markets. The good news is that now we have the experience curve and the capacity going forward to not only feed BetMGM with what it needs, but also feed better, more exciting products for our customers in other key markets. And we must prioritize getting our products right in the key markets, particularly the UK and Brazil. Now, I believe that the strategy that was presented in November is sound. And I'm going to give you a couple of charts on it in a few. So I've got to talk to you in a couple of charts time. But actually, right now, the key isn't strategy strategy. The key is delivering and executing on brilliant basics. And that's where we are going to really focus our efforts. The devil is absolutely in the detail. It's a case, and this is what I say in the business, is roll our sleeves up, listen to the people in the business, and have an absolute laser focus on delivery. And I believe fundamentally this will deliver superior results. And importantly, on this journey, when a new permanent CEO comes in place, it is a perfect transition. Because why wouldn't we put in place the building blocks to make sure that we're now back ahead in the race? So I believe it is a completely consistent approach that we're taking. And now I'd like to step back and just do a brief overview of 2023. In all honesty, and I think you know it, 2023 was a challenging year for Entane. And without doubt, performance has been mixed. It's absolutely true we faced significant regulatory headwinds in some of our markets. However, our operational performance was also mixed. We delivered strongly in some areas, but in other areas, we had issues. So let me start on the positive side. I would love to call out specifically Supersport in Croatia. They go from strength to strength, strong double-digit growth, and a great management team doing a great job. However, on the other side of the equation, the UK. We have had a very long iterative process of doing multiple affordability measures. And that has generated, along with other things, significant complexity in the customer journeys. And in Brazil, there were some operational decisions that were made back in 2022 that simply did not work. We lost significant market share. However, we have taken action. The leadership has been changed, and we are starting to see strong green shoots of a big recovery taking place in Brazil. And Samir is going to go through how we're optimizing the customer journeys in both the UK and Brazil later on. I want to also call out BetMGM. It had a good year. delivering NGR at top end of range and also supported by a significant improvement in product. And there's a lot more to come in 2024. And then finally on this slide, I have to refer to the DPA. That was successfully concluded and it's a key milestone in getting to draw the line under a significant regulatory overhang for the business. So therefore now we can and we absolutely must focus in on executing our strategy. So just to remind us of our strategy. These are as presented in November. Top of our strategic pillars. It's who and what we are. We are a leading player in the global betting and gaming industry. That's where 99% of our revenues come from. And our goal is is to provide customers with the most entertaining experience with the safety of market-leading player protection. We have three key focuses. One, organic growth. Growing in our existing markets is a key must-win for us. Margin expansion. And Rob's going to talk through the financials and also where we are on Project Roma. And then winning in the US, the largest and fastest-growing market in the world. Clear objectives, and this is all underpinned by our key enablers. People and culture, product and tech, and good governance. And what I want to do just right now is take a pause and highlight and talk to people and culture. This is an incredibly important part of getting Entain back into winning form. We can, and we are doing better here, but there is a huge opportunity to drive performance through unlocking the power of our people. We have numerous initiatives in play in this area, and it's a team that from the top of the company, from the EXCO and to the senior leadership team, absolutely committed to increasing engagement, aligning objectives and breaking down the silos. I have no doubt, based on my many, many years of experience, because I'm quite old now, that these changes will generate improvements, absolutely guaranteed. So there's a lot to do, but we are taking action and we are executing it now. I just want to take a moment just to talk a little bit more about BetMGM. And I want to add a little bit more colour to the performance. You'll have already heard from Adam from BetMGM that it was a good year with the NGR, top end of guidance, H2 was EBITDA positive. But what I think is behind all that is that our team worked with the BetMGM team incredibly hard to start to deliver the type of product solutions and customer experiences that makes us really competitive going forward. And I think the successes that started to come through towards the end of 2023 mean that the alignment between ourselves, Entain, and MGM is better than it's ever been. I have a regular dialogue with Bill Hornbuckle, and I am confident that the relationship between ourselves is as good as it's ever been. And we've already started 2024 on a very good upward track. The Super Bowl went seamlessly, and there are new products and improvements to the apps, which Sati again will go through, which gives us confidence for the future. So with both parents of BetMGM committed to investing into the growth, we are positioned very well for 2024 and look forward to a positive market share progression. So in summary, my last slide before I hand on to Robb. we have a clear priority of winning in our core markets, must-win markets, the UK, the US, and now Brazil. We do that through commercial excellence, simplifying customer journeys, and providing our customers with great products. Another area of simplification is in our structures, enabling the business to be more agile and more efficient, and therefore more effective. Underpinning a successful execution It's the harnessing the power, the true power of our teams. And we have a global set of very talented people in the business. Quite frankly, this is not rocket science. It's really simple. It's difficult to execute, but it's really, really simple. My mantra internally is we focus in on the vital few, not the trivial many. And what do I mean by that? It means that we make sure we're laser-focused on doing the things that move the dial. It's about sticking to the plan, it's about hard work, and it's about delivery. We will not turn this business around overnight. It's going to take time, it's going to take sustained hard work, but we're already making some real progress with tangible outputs. So we are delivering, and we will continue to deliver tangible reasons to believe in Entain's future growth. And on that point, I'm going to hand over to Rob and come back at the end of the session. Thank you.

Thanks, Stella. Morning, everyone. So as usual, I'll take you through the financial highlights of our results this morning. I'll also provide more detail on our regional performance across our businesses, followed by an update on our efficiency program, Project Roma. And finally, I'll share more detail on the outlook statement that we included in our R&S this morning. Let's start with the financial highlights from 2023. And as usual, all revenue growth numbers that I mentioned are in constant currency. As a group, and therefore including our share of BetMGM's revenue, we delivered NGR growth of 14%, or plus 2% on a pro forma basis. Within that, there were some favourable growth numbers. BetMGM delivered NGR growth of 36% at the top end of our guidance. In retail, NGR XUS grew 8% with the benefit of acquisitions, but encouragingly retail also grew 2% on a pro forma basis. And total online NGR XUS was up 12% year on year. However, as we know, our organic online business had a challenging year with pro forma NGR down 3%. Down 3% was in line with our updated guidance at Q3, but adverse to our expectations of low to mid-single digit growth earlier in the year. That online underperformance meant that EBITDA was 2% lower year-on-year at £974 million. That excludes the accounting of TAB New Zealand, which results in reported EBITDA of £1.8 billion. We've discussed the New Zealand accounting treatment before, and there's a breakdown of the impacts in the appendices. The underlying £974 million of EBITDA figure is in line with our revised expectations following those customer-friendly results in October. Further detail on Q4 trading can be found in the appendix. But in short, Group NGR in Q4 improved from 10% in Q3 to 14% in Q4, with continued pleasing performances across retail, recent acquisitions, and BetMGM. However, our pro forma online growth continued to disappoint, with Q4 seeing a similar performance to Q3 at minus 6%. Adjusted EPS for the year was 44 pence. You'll note from our R&S this morning that EPS inclusive of separately disclosed items was materially negative in 2023 after recognising the DPA settlement and taking impairments, in particular to our Australian business, following the point of consumption tax increases and softer market growth in that territory. To the balance sheet now, liquidity is strong and leverage ended the year at 3.3 times. On a pro forma basis, leverage is 3.1 times or 3.6 times if you include the full DPA settlement cost. Finally, on this slide, we've confirmed a second interim dividend of 8.9 pence per share. This brings a total for the 2023 financial year to £113 million, or 17.8 pence per share, which is in line with our progressive dividend policy and represents 5% growth year-on-year in dividend per share. The next slide now outlines our revenue mix and growth rates by market for each of our online and retail channels. All of the data on this page is pro forma, so as if we own the acquisitions for the entire year, and we also include Entain's share of BetMGM NGR within online. Firstly, you'll notice new segmentation, UK, international and CEE, as well as the US. We intend to report our ex-US business using these three segments from 2024 onwards, showing splits for online and retail channels, as well as reflecting our new operational structure under Samir's new role. we will also remove the new opportunities segment, absorbing those remaining costs into online. Removing new opportunities is symbolic of our new absolute focus on sports betting and gaming going forwards. To help you adapt your models to this new structure, we will provide more information with the Q1s and interims. Now moving on to key insights for 2023, and I'll start with retail. The UK and Ireland, it remains our largest retail business and it performed well in 2023, growing 2% on a like-for-like basis. International, which is two-thirds Italy, that grew strongly at 10% and CEE delivered 4% growth in retail. And seeing our retail businesses delivering growth like this is particularly important when also considering the long-term benefits to our online platforms in those markets, particularly markets where there are advertising restrictions like Italy. Moving now to online, where we see a mixed picture. The UK declined 6% in 2023. This was primarily driven by our implementation of new affordability measures, which have led to more complex customer journeys, but also due to limited product development while we prioritized the US. We've identified the issues in the UK and we're addressing them. And Samir and Sati will talk more about this shortly. International, that represents just over half of our online business, and it declined 4%. Whilst we saw growth in many territories like Italy, Georgia, Belgium, Spain, Canada, and the Baltics, we did underperform in some important markets, namely Australia, Brazil, Germany, and the Netherlands. Australia, that was down primarily due to slower market growth, but also from mitigation actions against point of consumption tax increases and new entrants increasing competition. In Brazil, as already mentioned, our performance was behind expectations as a result of past operational missteps and intensifying competition ahead of regulation. The decline in Germany, that primarily represents tightening restrictions on player deposits, but also coupled with a lack of regulatory enforcement. And lastly, Netherlands was also down year on year. Now, a decline was expected following re-entry of the previous market leader. However, the decline in H2 was greater than expected due to further tightening of compliance measures. On the plus side, BetCity remains number three in the Netherlands market. To CEE now, which was 8% of the mix and showed strong growth of 13% year-on-year, particularly in Croatia, where Supersport continues to lead in a growing market. So 2023 was mixed for online, with pro forma growth XUS behind the levels that we believe our portfolio should be delivering. The good news is that we understand where our issues are, both by market and at the product level. If we exclude regulatory impacts, we estimate that sports NGR for pro forma online was still in decline last year. Whereas in contrast, gaming NGR ex-regulatory impacts was in mid to high single digit growth. Therefore, we're rightly focused on those core underperforming markets and also on our sports product. And Sameer and Sati will talk to you about these shortly. Turning now to our usual EBITDA bridge, the impact of lower online growth can clearly be seen here on the left-hand side. Even after stripping out an estimated 121 million of regulatory impacts, our underlying business for online was only broadly flat year on year, despite operating in growth markets all around the world. Acquisitions added a very welcome 118 million of EBITDA to online, but it's clear that improving our online organic performance is key to returning to earnings growth. More positively, we're pleased with our performance in retail. You might remember last year I guided to £30 million of above inflationary costs for retail, reflecting wages and energy. As you can see here, the underlying organic business managed to mitigate around two-thirds of that, whilst also continuing to invest in the future in our estate, but also in new gaming cabinets and in SSBTs across many of our markets. Corporate costs increased by 18 million as we reached full RET contributions and made further investments into governance. After a few years now of above inflation increases, we should see this corporate cost base return to normalised growth going forwards. The next slide outlines cash flow and net debt movements during 2023. Underlying free cash flow was robust at £524 million, a slight improvement year on year, in part as more favourable working capital flows offset increased corporate taxes and increased capex, which largely reflects acquisitions. As always, a more detailed cash flow is provided in the appendix. We close the year with leverage at 3.3 times or 3.1 times on a pro forma basis, excluding the DPA liability. While payments against the DPA over the next four years will slow our pace of deleveraging, we expect to return to deleveraging from 2025, driven by a return to growth in online. Now on to our efficiency program, Project Roma. We continue to make good progress here to simplify our organization, enabling the business and our colleagues to be more agile in their execution and more effective in their delivery, as well as driving efficiencies in the cost space. We've completed the initial phase of the project, giving us increased confidence that we're on track to deliver approximately 70 million of net cost savings in 2025. I plan to update more fully on Project Roma at our interims in the summer. Finally, moving on to thoughts on the outlook for 2024. Firstly, importantly, trading so far this year has been in line with expectations. However, as we look to the balance of 2024, we want to highlight expected regulatory change in two of our key markets. In the Netherlands, the KSA have proposed tighter deposit limits with expected implementation in Q2. In the UK, we've got the overall story is now positive. We're delighted that this long-awaited regulatory review of the Gambling Act is drawing closer to a conclusion. We look forward to the implementation of online slot staking caps, which has been announced now. And we're encouraged by current discussions on a potential agreement for uniform, safer gambling measures across the market. This is revolutionary change for UK online, much like retail back in 2019 when the triennial review came in. And we think it's positive in the long run for Entame. However, for 2024, we may see further player disruption that comes with change. And equally, we may see opportunities to invest incremental marketing to capture market share as the playing fields finally get levelled across the market in the UK. In aggregate, we expect these dynamics across the UK and Netherlands could reduce 2024 EBITDA by approximately 40 million. In conclusion from me, we saw a mixed performance across the group in 2023. There were positives in retail, BetMGM and recent acquisitions, but our organic online business underperformed. However, we started 2024 in line with expectations. And whilst we are cautious on the outlook for online in 2024, we're making great operational strides to improve the business. And we've now increased confidence of a return to NGR growth by the end of this year and into 2025. To hear more about that, let me hand over now to Samir.

Thank you, Rob. Good morning, everybody. By way of introduction, I joined Entain in 2021 as chief financial chief strategy officer. Sorry about that, Rob. Mid-last year, I took responsibility for our LATAM region, where I initiated and led the turnaround of that business. And late last year, I took on commercial responsibility for the whole group, with the exception of our U.S. and CEE joint ventures. I have now been in my current role for just over two months, and I've spent my time deepening my understanding of our various businesses and teams. Today, I would like to share with you my initial areas of focus and key actions. To start off with, as Stella highlighted earlier, we have a globally diversified portfolio with strong underlying market growth. Yet, we have underperformed in certain regions in 23. And my immediate focus is on delivering organic growth in two of them. the UK, our largest region, and Brazil, the fastest growing market. I will use my time today to walk you through how I assess the business and the go-forward plan for both the UK and Brazil. The way I look at our business is through the important lenses of acquisition and retention. Of those two, retention is the key driver to return to organic growth. On average, prior year cohorts drive 80 to 85% of in-year revenues. Businesses that exceed that 80 to 85% net revenue retention threshold are able to sustain growth. The most effective way to bolster retention is by improving our customer experiences through better products. Today, my team and Satis are working more closely than ever to prioritize, develop, and deliver products that are simple, easy, and fun for our customers to use. Let me now come on to what we're doing specifically in the UK and Brazil. The UK is our largest region outside the US, and so it's critical. The online market is growing at about 5% per year. and winning here is essential to Entain's overall performance. On acquisition, we continue to successfully attract customers with our trusted brands. This is reflected in our strong actives, which grew over 30% in the last two years, with attractive payback periods on our marketing spend. On top of that marketing efficiency, we intend to utilize our retail portfolio to further bolster acquisition through omni-channel promotions and products. As a reminder, we have over 2,000 shops, which is the largest retail footprint in the UK with leading market share. This omni-channel approach will be enabled through a new single leadership team across both UK online and retail, which I put in place earlier this year. Now, returning UK online to growth, however, will require a step change in our approach to retention. While we have a very strong active base to build from, net revenue retention has gone backwards since 21, and we know we need to get better. And so we are proactively addressing retention through three levers. Firstly, our consumer-facing apps can be much better by focusing on brilliant basics, such as improved UX on our core customer journeys and site speed. Faster is always better for online customers. Secondly, improving key sports product features such as bet builders and cash-out functionality. And thirdly, simplifying our safer gambling journeys. We have rightly continued to introduce new measures to protect our players, but we have created complexity for both customers and colleagues in the process. For example, certain Safer Gambling Journeys have increased customer service centre contacts, resulting in longer wait time for our customers. Now, we intend to make these experiences simpler, easier, and better, and we'll keep you apprised of our progress. Hopefully, that gives you some flavor for what we are focused on in the UK. Now, turning to Brazil. As a reminder, Brazil is the fastest growing market outside the U.S., with approximately 2.5 billion pounds sterling in 24. As I mentioned, I began leading the business mid-last year and established a new local leadership team shortly thereafter. Although it is still very early days, Sporting Brett is seeing growth and we're beginning to deliver on the commitments we laid out in November. Firstly, from an acquisition perspective, we've seen first-time deposits returning to strong year-on-year growth driven by two key changes. One, shifting away from an over-reliance on pay TV towards both open TV and digital advertising. and two, a refreshed brand and creative strategy that is now in motion. From a retention perspective, we are seeing initial signs of year-on-year actives growth, as well as higher withdrawal and deposit activity per player. This has been driven by three key changes. Firstly, launching instant withdrawals and deposits has been critical. Through a better integration with PIX, Brazil's most popular payments platform. Second, increasing our local sports offerings focused on more Brazilian football. And third, expanding our gaming portfolio to include local favorites such as Aviator, a virtual crash game that everybody loves in Brazil. To wrap up, I am pleased with the changes we are making in Brazil and the positive response from our customers. I hope you can see that we are forensic in understanding the issues and laser-focused on addressing them. Now, we're already bringing this approach to the rest of our business, including the UK, working much more closely together with Sati and the rest of our teams to put ourselves on the right path back to organic growth. With that, I'll hand it over to Sati to talk about our progress in product and tech.

Thanks, Matt. Hi and welcome. I'm Stanley Benz, Chief Product and Technology Officer at Entain. Excited to be back to share the progress we've made since November and outline the plans for the rest of the year. In November, I highlighted the richness of our platform. Remember, it's regulated in 40 or more jurisdictions. It covers US and European sports, casino, poker, and bingo. I also talked about Brilliant Basics, It's no surprise that talking to customers, they want us to deliver on the Brilliant Basics simple actions that just work every time. And finally, I touched on how market localization is making a big difference in the U.S. So today I want to cover the following three topics. First, I want to highlight the product improvements in the U.S. and demonstrate how our relentless focus on Brilliant Basics is really driving product improvements for Bed MGM customers. Second, I want to share the progress we are making in scaling localization capabilities and accelerating our product velocity, both key ingredients to winning in our key markets. And third, I'm going to highlight our customer-facing product roadmap, sharing key product milestones market by market. So let's jump into this. On the back of launching Single Account Single Wallet in our 21 markets before the NFL, I was thrilled that in January we launched our app in Nevada right before the Super Bowl. Knowing that two-thirds of the fans in the stadium were using our app during the game highlights the value of launching in Nevada ahead of the event. And Vegas is unique. It's the destination for bettors in the US. Even before we got to the Super Bowl, we had some great wins for NFL customers. For example, Our in-game uptime increased 10 percentage points over the 22 season. A fantastic achievement for our sports teams at Entain and BetMGM. Quite frankly, these are the brilliant basics that customers actually love. Our single-game parlay product in the US is getting better and better. As you can see, The S3P stats highlighted here, we're seeing players engage more and more with their single-game parlay products. Yes, we have more to do, but the path is very clear. And we're seeing some great momentum. And I'll share more on our progress with Angstrom a bit later. Our game library continues to grow. We now have 3,600 games in the U.S., That library generates close to 300 million spins a week. Finally, in November, I talked about getting to the top end of the leaderboard on app launch speed. Well, we're getting to a much better, much faster app experience. And the great news is that the work that we're doing in the U.S., the speed improvements we're making there are actually reaching other entained markets now. So what you see on the right-hand side are images captured from my phone, overlaid with the timings that show app launch speed in seconds. So every few weeks, I put myself in the shoes of our customers and I record key journeys on my phone and track how long these core journeys take. I must say, I feel so much happier now than a year ago. Under 2.5 seconds for an app launch time is actually pretty good. Our focus is paying off. We absolutely want to be a leader in AppSpeed in all our key markets. That ongoing focus on brilliant basics is vital. It's actually a never-ending priority on our 24 roadmap. So I'm loving the product improvements we're all making in the US, but it's going to get better in other markets too, much better. We aspire to be a world-class digital product team. That means delivering fresh, slick, fun, modern experiences. The experience is that we want to compete with Silicon Valley companies, not other betting companies. The very best digital companies deliver smaller, more frequent product releases that meet and exceed customer expectations. That's our ambition too. We want to set new standards for betting and gaming experiences. So how are we doing this? First, we have rewritten the rule book on how fast we can deploy customer-facing product improvements. For our sports book, we can now deploy feature improvements every two weeks. In 2023, we can only release every six to eight weeks. Today, we can also deploy smaller product improvements on demand every day if we want to. This is how product-led digital companies operate, and it's far better for customer adoption to see smaller changes more often. So this year, we will have four times more Sportsbook releases than we did in 2023. Second, and I spoke about this in November, in 2023, we started building dedicated customer-facing teams for the U.S., In 2024, we are scaling from 10 dedicated market teams to over 30 dedicated market teams. That means in the US, in the UK and in Brazil, we can dedicate capacity to focus on unique customer needs for those markets. For me, it's super exciting to see a global platform and yet be totally locally focused. In this model, any improvements in one market can easily be transferred to another. And finally, we have completely rewired our front-end sportsbook architecture. What does this mean? Simple changes to brand, UX, navigation, icons, et cetera, meant we had to make the changes in six different products. In sports, gaming, cashier, bingo, poker, and so on. It also meant multiple teams had to coordinate these changes. There were multiple handoffs, and quite frankly, our experiences across products was very, very inconsistent. Going forward, those changes, those design changes that used to take weeks, can now be done in one place and seen across all our products in just a few days. That's six times less effort for design changes across our product portfolio. With this in place, we can now refresh and modernize our interfaces. Over the next few quarters, we'll be rolling out design changes that reflect who we want to be going forward, not who we were five years ago. And I'm very confident that our customers are going to love our new designs. As I'm sure you can tell, I'm really excited about the underpinnings we're putting together to increase the pace of product improvements. So let's talk about what's on our roadmap for 2024. Well, we're off to a great start to the year. We've already released our app in Nevada right before the Super Bowl, as I said earlier. And of course, we had a fantastic Super Bowl weekend with a much faster app across all the U.S. During peak times in the event, we were serving 1.3 million clicks per minute on our BetMGM Sportsbook, so we can operate at scale. Next up in the US is our fully integrated Angstrom baseball models, followed shortly with NBA models. We have some exciting 100% in-house single-game parlay markets coming online for baseball. For me, I'm most excited by our in-plate micro bets, so look out for that next month. It's exciting to see our product ambitions come to life in the US. We're really starting to get some fantastic momentum. In 2024, we will go beyond the US. We want to deliver products that our customers will love to use in the UK and Brazil. Central to that is leveraging our US work on single game parlay and angstrom. We want to build our own European football models and to completely revamp our bet builder capabilities. We're also going to migrate some of the great design work we've done in the US with BetMGM to Brazil and to other markets where it makes the most sense. And as you heard from Samir, Ladbrokes and Coral are getting some much needed love. Our teams are working flat out to fix the basics, build our future BetBuilder product, and refresh our designs all in time for the next football season. And just to be clear, this roadmap only reflects the key customer-facing product improvements. We have much more on the roadmap, including some really exciting product innovations coming out later this year. So to recap, we're on course for a great single-game parlay product powered by Angstrom for the US. Our focus on Brilliant Basics is taking hold, and we're getting some really positive customer feedback. We want to always be at the top end of the leaderboard when it comes to speed, and we're on track for that too. We have built a product development engine that can deliver better quality experiences at a much faster rate. By the end of this year, we'll have a full localization capabilities in all of our priority markets. And finally, we've started to build an innovation agenda. More on that later in the year. I see no reason why we can't start to win share on our product capabilities going forward. I'd now like to turn it back to Stella for her closing comments.

Thank you, Sati. Thank you, Samir. And thank you, Rob. So I think it's clear we had a year in 2023 with many challenges. But I think the good news, and if I were in your seat, I would hope that we would do this. We are telling you the full suite of our issues, but also the suite of our solutions. We know what's gone wrong and we're laser focused on doing things to fix those and to drive our strategic priorities. This year definitely will be a year of transformation and progressively, day by day, we will demonstrate that the group can get back to structural growth as we exit the year. Thank you so much for listening today. I really appreciate the time. We've taken quite a long time on this, but now we're going to open it up to questions. So I don't know who's going to hold the process on this. Davina.

Usual admin, if you give your name and number before we start, and say where you're from, and then David will have an iPad to get the Q&A via the internet as well. So if we start, James.

James Ronan-Clark from Barclays. My first question is for Stella. You talked about culture earlier. It can obviously be difficult to inspire and incentivise staff at a time when the share price is underperforming and operationally it's not been what you've wanted. So can you talk about the green shoots of improvement that you're seeing there and the atmosphere amongst the staff? My second one is on online growth in 2024. So I think, Rob, you said at the Q3 update that you'd expect to see low single digits. Given the regulatory impacts that you're referring to here at EBITDA, what's the impact on the top line and also the exit rate from 2024? And then finally... On product development, it's a major focus in the UK, Brazil, and the US, and that's totally understandable. Big markets and very exciting markets as well. How can you reassure us that you're maintaining your speed of product development outside of those markets? Any examples you can provide about improvements? Because obviously certain markets did underperform as well there. Thank you.

Right. So I think I'll take the first one, and then Robin... Satya, you'll take the next one. So, look, I could talk all day about culture, so this is a bad question to start with, okay? The organisation, 30,000 people or so work in Entain in all sorts of different levels. And in order to motivate people when we've had a period of bad results, the key is having a really open dialogue with people, making sure that people in the business understand that we understand that we haven't been quite right. And it is very, very important that authenticity and honesty is part of that journey to getting back into a better place. Then you... increase the level of commitment by a whole suite of things that we do. And I can give you some examples. Really taking advantage of communicating in depth into the organization to make sure people know what the roadmap is that we're on. One thing which has been very liberating for staff in the organization is to feel the pride in being a betting and gaming company. I think some people got a little bit confused about interactive entertainment. And people need to feel pride and they need to feel that there is a sense of momentum and direction. And I think we're putting that back in. We can't resolve the problem immediately that bonuses will be not great this year because the performance was not great. But again, it's about a roadmap to say we are improving the product. we are understanding the customer journeys, and we are making sure that we're working to get high-performance teams into the organization. If there's one thing I know, it's about how to build engagement of people in organizations. It's something I have done before, and it is literally, as I said, you roll your sleeves up, you engage with people, you generate that momentum, that sense of pride, And then you get to a better outcome. But there is no silver bullet. You are judged every single day on doing the right thing. And then people give you their followership. You can't demand it. You have to earn it. And I think the executive team, of which most of them are here today, absolutely have bought into that journey. And the big layer, the layer of senior leadership team, we call them, the Entain leadership team are also engaging in that journey. But we face the brutal truths. You know, when we're not doing things right, we're trying to get under the skin and get that authenticity. I will stop.

So let me take the second question. Morning, James. So this was about online growth expectations in 2024. As you rightly said, back in November, we called out a best forecast of low single digit growth for the year with decline in H1, growth in H2. So what does this morning's guidance mean for that? Well, the first thing, important to say that we're on track year to date. And we were also in line with expectations across November, December. So the last four months, basically, in line. The outlook statement this morning was because we wanted to say what we see over the balance of the year, just be super transparent about what we see. I'll come back to explaining where the numbers come from in a moment. The 40 million EBITDA impact, if you translate that entirely to lost revenue, that would be around two to three points. So therefore, that low single-digit growth could become low single-digit decline. That's a mathematical consequence of what we're saying. Wouldn't necessarily change the exit rate, which was mid-single digits that we spoke about in November, so that's unchanged. Let me just, now I've got the moment, let me talk a little bit more about the 40 million. It's obviously the new news this morning. So part of that is the Netherlands. It's a smaller part of it. The KSA updated just before Christmas, so it's new news versus the November guidance. That does feel likely to happen to us, and therefore important to clarify that we expect those changes to be made and that you should assume is an ongoing sustained impact out into future years as well. The larger part of the 40 million is recognising that the UK, as I said earlier, is about to embark on the most seismic change to the online regulatory environment that we've seen for a while, both in the shape of a state cap on slots and, we hope, a uniform approach to safer gambling across all operators. What we wanted to do was allow for two things. One, as much as we believe that will be a positive for Entain, but also for customers, think it'll be a positive for customers, all the regulated operators, certainly a positive for Entain in the long run. One, we want to recognize that with any change, there can be a cost of implementation. There may be some players that are impacted, and so some short-term negative. Two, if the change goes as we expect it might do, we would like the flexibility to be able to invest more in marketing to recapture some of the market share that we've seeded over the last two or three years. So we're creating the ability to do that. The reason why I give that clarity around marketing is if a large chunk of the 40 is marketing, that's not an adverse revenue impact. And so therefore the question is, it's quite hard to answer with precision. But for the sake of simplicity, if you assume it's all revenue, then we could end up being low single-digit, negative, based on everything that we see today. Importantly, though, for the long run, we think the UK developments are a positive. So you'd like to think it's a positive impact to 25 and beyond.

James, on your third question, regard to kind of product... and the implications of kind of focusing on three markets and what about the rest. I think the great news is that There's a lot of work we're doing that is on shared journeys, not specific to a market. So speed, for example, reflects to every market. I think if you look at our BWIN product today in Europe, it's probably the fastest step in the market, not because we focused on it, but because we focused on other markets. All the journeys around cashier will also benefit all our markets. And so there is a trickle-down effect of our work in the UK, US, and Brazil. One more example, the BetBuilder product we're building for the UK will be available anywhere where there's football markets. So I think we see significant improvements for our non-key markets as a result of our prioritization.

Hi, good morning. Estelle van Groot from J.P. Morgan. I just have two questions. To come back on 24, I guess it implies slightly lower online margins. Are you still comfortable with your midterm ambition, especially the online margins you guided for portfolio 25? And just one on Brazil, you mentioned small improvements. Can you just comment on the competitive landscape in Brazil right now?

Do you want to take that and then Sati?

Let me kick off with online EBITDA margins. Back to the last question. If the 40 million is all NGR driven or even if some of it's marketing, we would expect some compression of the 2024 EBITDA margin as a consequence to that. To the mid to longer term EBITDA margin, clearly that's a long way away. What I would say is that the only new news that would be a negative would be the Netherlands. You have to assume that that has some compression on EBITDA margin. If the UK turns out to be positive as we think it is, then that would be a positive to margins. I'd also say that Project Roma, I touched on it earlier, having completed the first phase, we have increased confidence in the impact of Roma. on margins as well. So I would say a mixed picture bearing in mind the Netherlands aspect. Perhaps the last thing to say, just to be super clear, and I know it's a bit awkward, but if we withdraw the new opportunity segment and then reallocate that remaining cost to online, that equates to about a 0.7 impact to online EBITDA margins. So it's a reallocation, but nonetheless. And that does have an impact. But on a like-for-like basis, the medium-term guidance still stands. Just Netherlands is a drag. Hopefully, UK is an opportunity.

And on the Brazilian question, look, the market is definitely, you know, very competitive, certainly ahead of regulation, new entrants, a lot more domestic players and also foreign players looking at the market. But as I said... We've made a lot of changes, both in terms of our front-end products, our payments capabilities, and we feel good about the early signs of the turnaround in Brazil.

Hey, morning, everyone. It's Kiran Jagarwal from Bank of America. Just three questions from me. Firstly, on Angstrom, once it's fully integrated and Nevada also separately comes on board in terms of single wallet, single app, do you think your app, the BetMGM app, will be on par with the bigger operators, or is there more work needed after that? And then building on that, do you have any expectations on how much benefit you might get from bringing Nevada onto single wallet, single app? And the last one is around the other regions. Netherlands and UK, you've been clear on your expectations for next year, but the other problem regions have been Australia and Germany. How do you think those two might develop in 2024? Thank you.

So let me talk about... the product roadmap and expectations from a product perspective for the U.S. So I think from the single account, single wallet piece in Nevada, it's really dependent on regulation. So we're working with the regulator there. It's not a technical hurdle, so to speak. It's more of getting approval and doing any delta work for that. So that will be online as quickly as we can get that online. I think in terms of product parity with Angstrom, as far as we can see with our roadmap, yes, there's no reason why we would not be able to... meet the product expectations or of our competitors, at least from a customer point of view. So no reason with that. I think we will have a chance to differentiate differently than our competitors do. So I'm looking forward to that. In terms of numbers, I think I want to pass on that and let Adam and the team at MGM address kind of the commercial impact of those. I'm not in a position to kind of reflect their plans today. But from a product perspective, parity and even perhaps exceeding parity in some cases, in some use cases, is certainly on our roadmap.

i touch on australia and germany uh so australia we we have um as we said in november we we are cautious on the market outlook in 2024 both ourselves tab core flutter all calling the market down in 2024 still significantly up when you compare to pre-covered but there is a sense of of covert reversion in australia um Across 2023, we were slightly adverse to market. We were minus six. I think the market was more like minus three. So we have given up a little bit of share. We're probably 17 now, previously 18. But after a long run of gaining share in Australia, the point of consumption tax mitigation measures that I referred to earlier, we will annualize against that. So that will give us some benefit. But If the market's down, we do expect Australia to be down. But the big news for, or the main focus for the Australian team is actually New Zealand. So we continue to be super optimistic about what we can do in New Zealand. There's already the best part of 200 million sterling of revenue there that has no EBITDA against it. So once we drive EBITDA margins to normal levels over the years ahead, that's a great growth opportunity for us. The platform migration from Australia the old sort of state-run tab New Zealand business onto the Australian platform is due in Q2. So that'll be a nice catalyst for us. So that's the real focus. So if you combine the two together, we have a strong outlook for 2024, but Australia we would expect to be backwards. Germany is frightening to think is now only 3% of our revenue mix. For those following us for a while, it was 15% just a few years ago. So it's a much smaller piece of the pie. There's still a tough regulatory environment, as we know. There's no real update from when we were asked about it in November. The one thing I would do is just echo Sati's comments earlier, that things like the development in AppSpeed, the build of products. Germany's a heavily football business. It has to be a benefit, and Bwin's still such a strong brand in the German market. So, again, in the long run, we still think there's growth to come from Germany in the near term. I would expect the regulatory drag to still continue in 2023.

Morning. It's Joe Thomas from HSBC. I'd just like to, again, explore the £40 million, please. My understanding was that the £2, £5 slot limit was very much as expected. So I'm just trying to understand what the delta is and why it's different. And then I suppose it's a related question to that. When it comes to your affordability, How do you think you compare to the wider market, perhaps thinking of tier two and three operators, but also again to the tier one operators that are out there in the UK?

So two sort of related questions. So on affordability in the UK, the journeys we've gone on have been very complicated. We put in measures over a long period of time, which means that I think we are more complex in terms of the journeys that we go through with our customers than some of our Tier 1 and Tier 2 and Tier 3 competitors. So there is an opportunity here for us to... make sure that we're leveling the playing field in terms of the customer journeys that we're going on, while still retaining the same level of customer safety. So I think that's the truth there. In terms of slots, we welcome the change to the limits. I think it's a good thing, and we've been anticipating it. But it's not going to be implemented for some time. I think it goes live in September with a six-week period, for those limits to change. So it's going to not have much material impact in 2024, but going forward into 2025, we think we will see some upsides as there is churn in the market as people go from being these particularly Tier 2 and Tier 3 operators that have gone for very high limits.

And that really is the answer to the first part of your question as well. When you think about the UK outlook, you must think about 24 separately from 25 and beyond. So the £5 stake cap on slots, exactly as you say, is expected. It was the outcome we were hoping for. If it comes in late in Q4, more likely to be near-term negative and hence the call-out, but longer-term positive. And coupled with that opportunity or that flexibility to be able to invest more, you know, we have great brands in the UK with Gala, Foxy, now Brooks Coral, obviously. We would love to put some investment behind those and capitalize on the transformation that will happen in the industry. And so that flexibility is important to us.

And I just had one other thing just about the UK, and Sati, I think, mentioned it. Some of our apps have been a bit unloved in the UK. So, you know, we believe there's some great opportunity for customer experience, particularly on Ladbrokes and Coral, to get ourselves into a more competitive place. as we start to do some of the things that Sati said. And again, that's about us being honest with ourselves. Our apps don't get rated as highly as we would like them to do versus the competition, and so therefore our aspiration is to get that back into a podium position.

Thanks. And just one final one. I didn't get a chance to get into all the footnotes this morning, but I saw that you'd written down the long-term growth rates implicit in the Australian business, which is behind the Goodwill write-off. What are the long-term expectations now compared to where they were before?

So no change, really. You should think about the impairment as the accounting catch-up of the progress in 2023. So the point of consumption tax increases, but also the market being minus three. So the impairment is a consequence of that. In terms of the longer-term outlook for Australia, we still see growth, particularly when you roll New Zealand into it. Short-term, though, I'm reasonably bearish on 2024. I don't see growth in 2024.

Hi, just connected. A few questions from Joe Stauff. You may have answered some of them, but I can't answer for him, so I'll run through them anyway. Probably the first one is a bit more about clarity of phasing in the UK. So we talk about the need for both increased investment, i.e. marketing, but further regulatory adjustments. Do we expect both those to occur in first quarter and second quarter, or should the investment come after we finish the regulator adjustments? There's a bit of clarity around phasing. Samir, on Brazil, I think it was on your chart, but when did FTDs and actives first begin to grow again in Brazil? And then BetMGM, probably for a couple of you, Sati, did you say that two-thirds of those in the stadium for the Super Bowl were using BetMGM app? And Caesars has often been quite strong in Las Vegas and Nevada. Do we think, as a result, BetMGM is likely to be a share leader in Nevada? And finally, I think you partially answered it, Rob, but In Australia and the Netherlands, do we expect to grow in line with the markets in 2024?

Right. Quite a few questions. We'll try and answer them between ourselves. So I think phasing in the UK, I mean, we are very much, you know, dependent upon the regulatory changes when they actually happen. But, you know, we already know that the slots changes is towards Q3, Q4, and everything is back-weighted into Q4, really, in terms of investment. If we were to take advantage of marketing investment, it would be towards Q4, yeah? Yeah. Brazil?

Yeah, so just on Brazil, FTD growth started approximately mid-year 23, shortly after we took over and started shifting the marketing mix. And the active growth we started seeing early this year.

And then Bess MGM, just from the Nevada?

Yeah, look, it's currently, you know, Caesars and BetMGM from an online mobile perspective in the state. I think we've still got some work to do with single account, single wallet to really drive our position and improve our position. But currently it's, as far as I can see, a two-horse race.

And then Australia and Netherlands. Rob's going to pick that one.

So we've spoken about Australia, so I'll just focus on Netherlands. The reality is when change like the proposed deposit limits comes in in Q2, it's hard to know how you'll compare to others because you don't know what limits others already have. Our expectation is that we implemented fresh measures in the second half of the year, and that probably puts us at the more prudent end of the market. So logically, therefore, that's opportunity, but it's just too early to say. So, you know, at this stage, I would part that question until the interim.

One more. Sorry about that.

Hi, good morning. It's Roberta Ciaccia from Investec. I have actually three questions, if I may. The first one for Stella. So you talked a lot about simplification of the business, et cetera. Can you tell us what is your view in terms of brand strategy? Do you think you will keep all your brands? You talked also about reinvesting behind Ladbrokes and Coral, et cetera. What do you think, especially in the U.K.? ? Do you think you need all these brands? First question. Second question, probably more for Rob. We've talked about all the different key markets for you. We haven't really touched on Italy. What are your plans there? Do you believe that there will be more consolidation in the market? And importantly, when do you think you will have to pay the new license fees? Third question still for you. Dividend policy going forward?

Great. Thank you for the questions. So I'll start off on the journey of simplification. So simplification is actually a very broad thing that we are looking at and acting upon within Entain. Because of the way that things have built up over time, we have lots of processes internally where there are too many handoffs. It takes a long time to get simple things done. So, and again, these numbers may not be totally accurate, but they're certainly given to me as an example in the business. It doesn't matter if it's accurate. It's actually direction of travel. When somebody says to me to do a flight of advertising, and when I mean a campaign, I mean something simple, like putting together an email communication. And I've shown the journey that it actually takes something like 25 man hours to do it, when actually it should take something like half an hour. to do that kind of thing in terms of time. It doesn't matter if the half an hour is wrong and the 25 hours is wrong. It's the direction of travel. There are complexities when there are multiple handoffs in our organization to make decisions, and that means that people are slower, it takes a lot more time, and it takes the energy and the creativity out of things. So that's just one example, which is in the brand space. I use that one. just to paint a bit of color about how we can take complexity out of the system. You can take complexity out of the system by making sure that objectives are aligned from day one. And one of the things that I hope we've demonstrated here today, that alignment between product and tech and commercial is absolute critical component of releasing additional value. The fact that we've got Seti and Sameer set on the stage today is not by accident. It's because we see this as a key unlock, not only just within Entain, but as an unlock with Entain and BetMGM. We now have top-to-top commercial and product and tech meetings on a regular basis with counterparts in BetMGM. So Samir comes along to those meetings because we've got to make sure we align and we actually have a flow through. So that's just a sort of picture of why we can improve our operational simplicity and get significant values from that. If we then talk about brand strategy, yes, we do have a lot of brands around the world. Quite a lot of them are very localized and it would be very foolish for me to suggest that we would change that narrative because a lot of what we do as we increasingly know, is about local enjoyment, about how the brands personify themselves, you know, dialing up the elements that are important to our customers in different places around the world. I think the question about Ladbrokes and Corals specifically, I mean, I think one could do a desktop analysis and say, wouldn't it be more efficient to have one brand? That's a very big ask, you know. We would have to get very much under the skin of it. to even think of going down that route. So for today, certainly under an interim CEO, I think the right thing to do is try and optimise the way that we are delivering both Ladbrokes and Coral as more identified separate entities. I would say the best thing to do is be more clear about the differentiation that we have of those brands. But I think the question's a really good one, but I think it's one that takes quite a lot of long-term thought in terms of actually going forward. So, look, that was my question. Are you the second question?

Yes, I'll do Italy and dividend policy. So, Italy, I'll start with the easy bits. When do we expect online licensing to happen? Our planning assumption is Q4. You might know more than I do, Roberto, but Q4 this year for online licensing. In terms of our plans for that market, our absolute focus is on our own business and in particular Eurobet, although BWIM will benefit from the bet builder developments that we were speaking about earlier. So Eurobet's the focus. In Italy, it's a fabulous market, as you know, the growth. potential is just as good as it was a few years back. We're number three or four, depending on how you measure it. So good, strong position in that market. Great retail estate. Retail's taking share. We have ceded some share online to the market leader, as is the number two and the other three straight four. But as we look forwards on an aggregate, we've got a strong position there in a growing market. And I think I'm right in saying that we've doubled our EBITDA in Italy over the space of just three or four years. So continue to invest and support that market. In terms of dividend policy, so we've announced our progressive dividend policy. As always, the board will keep that under review. But just recently, the Capital Allocation Committee discussed it and were supportive of continuing with it. So that's where it stands.

Hi, back to me. Before I ask the question, if anybody's on the webcast and they want to ask questions, they're not getting through on the Q&A thing there, then do email them direct to me. And in that instance, I have got one from Monique Pollard. And she asks, Rob, could you please give us some more colour on 2024 like for growth aspirations for online split by UK international and CEE? Will UK product improvements for 2024 that build a cash out improvements, etc., just be playing catch-up to the market leaders or pushing ahead of peers? I think it's probably for you, Sati, and Samir. On the U.S., how quickly should we see wind margin expansion and market share improvements come through? Could it be as early as Q1, Q2, for example?

Okay, so I think you're taking the first question there. Or do you want me to take one first? You're okay?

No. Go for it. I can dive in. So it's early in the year, and I try and refrain from setting too many expectations early in the year, but of those three segmentations for online, I would expect CE growth, UK most likely decline, and international more mixed. Okay.

So on the UK piece on that builder and cash out, I think when we talk to our customers, what we're talking about is meeting their expectations. So it's really getting to a parity state before the football season. But what we're really trying to do is own the entire experience going forward. And so I expect beyond the start of the football season, we'll be able to push on and be differentiated in the UK. We are also innovating in the UK, but I'm not going to share what that is today. But we will be in a position later this year to actually do things that we've never done or haven't done in recent years to... to actually give something unique from our brands.

And I think the last question was on margin expansion in the U.S. I don't know if we can really comment too much on that, but I think we can say that we've got some really good stuff with Armstrong. Yeah? Yeah.

Okay, thank you. Another question come through from Andrew Tam. This is about leverage. If you add in the DPA, then I think 3.6 times was the number. How do we do leather? Is organic growth enough or do we have to do or do we need to do something else?

Yes, I can take that. So firstly, to confirm, 3.6 is the number on a pro forma basis at year end, inclusive of the DPA. The primary and best way to deliver is EBITDA growth. And that's, of course, the absolute focus of the management team. And you've heard from Sati Samir, that's what we're all working around the clock to do, is deliver EBITDA growth. Clearly over time, things like the DPA will roll off. Roma will help CapEx. Maybe interest will come down, interest rates at some point. SDIs will come down. This year we've got quite a big outlay from Project Roma one-time costs, for example. But really, EBITDA growth is the primary way to deliver.

Thank you. Another one from Ivor Jones. I think you tried to head this off at the past with your early comments, Stella, but when will the Capital Allocation Committee come to conclusion about possible disposals and how and when will that be communicated?

Well, I thought I had it off at the pass, but I'll try again. The Capital Allocation Committee has only just really got going, and there is nothing to report because there is no output at this stage. So that hasn't changed since 20 minutes ago.

I have had a follow-up on similar lines, but slight tangent to that.

It hasn't changed since 21 minutes ago.

From Nick Kissack. It was more about the objective. What's the objective of maximising shareholder value? What do we mean by that?

Well, I think you've got to look at the challenge we have. Again, elephants in the room. Our share price hasn't been very good recently. And so if you're looking through the lens of maximising shareholder value, there have been some clear missteps. And isn't it a good idea to look through the lens of what the opportunities are to really get that back on track? And so it is one mechanism. that I think is a very valid one to look through. And so the Capital Allocation Committee is a subcommittee of the board. It's a very valid thing to have. But at the same time, in parallel, as a business focus, the management team are really focusing in on getting back to organic growth because that is the biggest way of maximising shareholder returns.

Yeah, I think we've answered that. I had a slight one from another one from Ed Young, but hopefully, Ed, we've answered it now. But his second question is, in the context of being a betting and gaming business, which we're all pleased to be, rather than something else, what are the costs that were booked in new ops that are worth keeping and absorbing into online rather than cut costs?

Should I say that? Yes, because I don't know how to answer it. So the main costs that have been cut for 24 onwards relative to 2023 and prior was investment behind Unicorn as a B2C brand. So that's where savings have been made and that was communicated as part of the Roma savings as well. What's left, a couple of components. One is the esports wagering team has continued. Why? We know that some operators in our market around the world, for them, wagering on esports is a big part of their product offering, sometimes a number four product, sometimes a number five product. Actually, for SDS in Poland, it's the number four product. For us as a group, I think it's number 15, something like that. So we think it's relatively small investment in a team that will help us have the most extensive esports offering on the market in terms of breadth of product, breadth of betting opportunities. And therefore, if you like wagering on esports, then come to our brands. because we have the most in-depth offering, and then you get cross-sell benefits as well. We see quite high cross-sell between sports betting and esports betting. It's particularly popular in Europe and LATAM parts of the world. So that's the main cost base that we're retaining. There are some other investments in technology, innovation, that went into that segment that we want to keep, and that transfers across to online.

Thank you. One from changing tack, one from Jack Mann. Underlying finance costs increased quite significantly in 2023, as I'm sure they did for many other companies. What does 24 look like?

So as I think about the increase in costs, the majority of it reflects interest rate rises. That was about 60% of the increase. The balance reflected the additional debt, in particular following the super sport acquisition at the back end of 22, meaning that that was already in flight for the whole of 2023. I would expect some incremental interest cost, but it feels like the interest rate environment is more stable, and therefore that big uplift that we saw in 2023 I don't expect to be repeated.

Thank you.

That's Simon Davis from Deutsche Bank. Three quick ones from me, please. Can you update us on rollout of ARK into your international markets? How far has that got? And are you refining the process so that you don't have the same levels of drag as you've seen in the UK? Secondly, on Brazil, you referred to some operational mishaps, I think it was, or missteps. Can you give a bit of granularity around what those were and to what degree they have all been addressed? And finally, progress on bringing a new CEO or announcing a new CEO, how long can we expect that to take?

Shall I take offense to that question? No, it's fine. Look, so first of all, ARK. ARK is in many of our markets. It is part of our toolkit for safer gambling. It is not the only one. It is an important part of the journey, but we are using a suite of other things in different markets to make sure that they're the appropriate measures. are being used. So that's the way I think I would approach that question. The CEO process, we have a very high quality recruitment consultant that is retained working on this. It has been obviously a priority for the board. The key thing is to get the right person to do the job in the long term. So hopefully the benefit, one of the benefits that I may bring to this situation is that we, you know, gives the breathing space to recruit the right person, whether there needs to be any sort of time for notice periods or anything like that, we can handle that. The absolute critical thing is it's the right person with the right experiences that comes to do this job. And the process has very much taken advantage of the opportunity to look into spaces where we can get people involved. to the interview process who've got relevant experience, not just CEO experience, but experience that can easily translate into a business like Entain so that whenever that change takes place, you know, we don't drop a ball. So that's where we're going on that. And then I think, Samir, do you want to talk to the Brazil question?

Yeah, so on Brazil, I think the – One of the biggest mishaps was missing the PIX opportunity. So PIX's ubiquitous payments and PIX Instant is just a critical, critical customer feature. People want to come in and out, deposit money, withdraw money, play and play. And so that had a disproportionate impact on our business, and that was one of the first things that we started to focus on, and we saw almost immediate sort of impact by providing that key customer feature. I think from a marketing perspective, the prior team leaned in too heavily into paid television. So in Brazil, you've got 200 million-plus viewers but paid TV is a relatively small, upscaled market. And so turning away from open TV, where you've got broad football rights on Globo and elsewhere, I think was just a strategic misstep. And so we're trying to address that by increasing our exposure to open-air TV. Obviously, those deals are, you know, as I said, the market's competitive, and a lot of people want that. uh, that, uh, that, that, uh, advertising space. Uh, but we've got longstanding relationships. We've got a trusted brand. We have good relationships with, with, uh, a lot of the media houses. We've got a new agency that is helping us negotiate some of those deals. And then finally, you know, we're really addressing the product suite and so becoming a lot more localized, Serial Markets, Seribet, and so really focused on product and localization and better marketing execution. And those are the three things that I think that you've got to do in all of our markets that are underperforming, and that's the approach that we're taking. both there and in the UK, and we'll roll that out elsewhere as we need to.

And maybe just add one last thing, which was we were running Brazil from Europe, whereas now, well, firstly, Samir took over with extensive LATAM experience, and now we have an operational team on the ground in Brazil. And so you're less likely to miss these major developments that are happening on the ground, and you're much more agile.

Okay, unless there's any more questions, I think I'm going to wrap this up and say thank you very much to everybody for coming. If there's any sort of follow-up questions that you've not answered, clearly speak to the AIR team and we can hopefully answer those questions. I just hope that you realise that we have really focused in on getting the inputs right for this business, really focused in on what we've done right, but very importantly we've lasered in on where we haven't got it right. And if you believe that inputs that are good generate good outputs, these will return Entane back to the growth that we all believe it deserves. So thank you so much for being here.