Entain plc

Hello everyone and thank you for joining the Entane 2026 Q1 Trading Update. My name is Lucy and I'll be coordinating your call today. During the presentation, you can register a question by pressing star followed by 1 on your telephone keypad. If you change your mind, please press star followed by 2 to remove yourself from the question queue. It is now my pleasure to hand over to Stella David, CEO, to begin. Please go ahead.

Thank you and good morning everyone and welcome to today's Q1 results call. I am delighted to be speaking to you again and sharing another strong set of Entain results. I'm also very pleased to be joined by Mike Snape for his first Entain update. So welcome, Mike, and it's great to have you on board. This morning's call will broadly follow our usual format. I will begin with an overview of the quarter. Then Mike will take this opportunity to share some initial reflections before he runs through the Q1 trading performance. And then we will finish with your questions. So let's get started. Entane continues its positive trajectory. Our diverse and globally scaled portfolio of podium positions is a powerful engine which is proving it can deliver consistent and sustainable growth. We maintain a relentless focus in executing against our strategic priorities. Which saw us exit last year with strong momentum and this has continued so far this year. I'm also very proud of the leadership team we have in place. who are focused on increasing both our pace and our capacity, enabling us not only to do more, but also continue to improve our delivery. Now turning to Q1. The grid delivered results in line with expectations. Net gaming revenue was up 3%, within which online was up a healthy 5%. Importantly, Q1 being in line was despite most markets experiencing particularly customer-friendly sports results. So a better reflection of our underlying performance and momentum is volume growth. In Q1, our volumes were up 8%, with an impressive plus 10% for online. Our online NGR and underlying volume growth has not only accelerated from our 2025 exit rates, but continues to come from across our portfolio, and I'm delighted that Q1 marks our eighth consecutive quarter of online growth. The UK, once again, was a standout performer, delivering another great quarter. And we fully expect to have gained both share in online and retail. This sets the world to withstand the impact of the draconian tax increases better than the competition. And a point worthy of note, we paid £574 million in UK taxes in 2025. whilst the growing black market pays zero tax. Hence, we remain focused on lobbying government to take action to stop the advertising and promotion of these unlicensed sites. Australia's recovery continued and is now back to meaningful year-on-year growth, and we expect to continue to having made solid market share gains. So a great performance which reflects the new management's disciplined and reinvigorated approach. Elsewhere, Spain, Canada, Greece, Georgia, and New Zealand all continue their double-digit MGR growth. A market that's been steadier than anticipated this year is the U.S. Now, I won't repeat it in detail, but as you heard from Adam earlier this week, Best MGM continues to execute its plan, deliver profitable growth, and remaining rational in a noisy market. This disciplined approach allows them to remain comfortable of delivering EBITDA still within their guided range, albeit at the lower end, despite softer top-line growth. We have strengthened our foundations to improve operational execution and are back to delivering high-quality top-line growth. And we have a strong pipeline of activities to continue that journey. These include the many opportunities from AI enablement, improvements to player journeys, and exciting new features such as side-bet jackpots, revamping the UK Ladbrokes app, and a sporting interaction brand in Canada going forward in a very positive way. The wider rollout of SportingBot, our new AI assistant ahead of the World Cup, as well as deepening our engagement with sport fans across Europe with new campaigns and partnerships. We're focused on driving greater efficiency effective capital allocation, and, as I have said before, we are fully committed to strong cash generation. So, just to summarise before I pass to Mike, we have started 2026 with strong momentum. The business is well positioned, getting sharper every day, and we are navigating the impact of the UK tax raises as well as anyone. We are reiterating our four-year guidance and remain confident in generating over 500 million of cash annually from 2028. We have a strong team and a busy pipeline of initiatives, and I'm excited about the opportunities in the year ahead. And while it is early days, Q2 has gone off to a strong start, and we look forward to the World Cup in June. And on that note, over to Mike. Mike.

Thanks, Stella. Good morning, everybody. I'm delighted to be here. Before I talk through the Q1, and Stella's really captured the key headlines already, just a few thoughts on first impressions and a flavour of what we've been focusing on in my first few weeks. I think it goes without saying this is clearly a strong business with a model that's performing well. To pull your results in March, and this update is a testament to that. We're growing volumes, we're growing share, and we're building growth on growth. The front end of the delivering, and we see continued opportunity to do that across all of our markets, a diverse portfolio that gives us the ability to both trade through different macroeconomic conditions, and most importantly, absorb or mitigate financial shocks, such as the UK tax increases. That said, as you heard from Stella at the full year end today, there is far more for us to do to earn our value here. We have significant potential to optimise our cost base, both to improve operational leverage as we continue to grow volumes, and also, importantly, to accelerate investments in driving the top line, taking advantage of all the opportunities available across the portfolio, particularly in markets like the UK, where the tax increase has changed the competitive landscape. This does not mean a new project. It's not time-bound with an end date or a target. It's putting in place the right model to support the business through its continuous improvements and driving growth, and today from what I've seen, we're aiming in the foothills. We also need to ensure this growth converts to cash. Alongside driving volume and revenue, cash, deleveraging and balance sheet flexibility are our top priorities, and you can expect our approach to capital investment and other actions going forward will reflect this. This again is an area where we see a lot to go for, and will be a consistent theme So lots of exciting opportunities ahead, lots for me still to learn, but Stella and I are looking forward to sharing more of our thoughts and our plans at the entrance in the summer. Coming back to Q1, and as a reminder, all the growth numbers that I quoted there are in constant currency. It's worth highlighting that alongside NGR and sports margins, we've included volume growth in the release today. It's a metric we've often referenced in remarks and in previous presentations, and we think it gives the cleanest picture from sports margins. So as Stella's already said, we've had a strong start to 2026, with the momentum from last year not only continuing, but accelerating into Q1. Group NGR was up 3%, with strong volume growth of 8%, again evidencing the underlying health of our business, adjusting for that sports margin noise. Online NGR was up 5%, with volumes up 10%. Customer-friendly results put sports NGR down 1%, but was more than offset by ongoing high gaming strength, up 9% in the quarter. Similarly, in retail, softer sports margins were supported by wages growth and gaming for overall volume growth of 3%. Importantly, this total result was driven across the portfolio, and with volume growth accelerating through the quarter in our largest online markets. The UK and Ireland turned in another fantastic result, Total NGR was up 6%, with online at 13%, all the more pleasing given we're lacking a 23% comparison from last year. Retail also continues to perform well, flat on a life-like basis, and we see customers continue to engage strongly with our gaming and sports terminals, with that volume and wages growth reflecting our leadership position on the UK high street, which we're taking every opportunity to capitalise on. We can't make any claims on market share yet, as the data hasn't been released, but when it does come through, we're confident it will show we are continuing to recapture share. That high-quality retail offering remains an important omni-channel differentiator for our online business, and we believe makes us best positioned to navigate the UK market as it digests the recent tax changes. Moving on to international, also a strong start to the year across many markets with volumes up 9%, but offset by unfavourable sports results. International online NGR was 2% higher, with gaming performing well, up 8%, dampened by a 1.4 percentage point year-on-year sports margin headwind against a tough margin comp and reflecting customer-friendly sports results, particularly in February. That adverse sports results impact was most pronounced in Brazil and Italy, both of which saw a particularly challenging margin but pleasing volume growth, especially in Italy where volumes were double-digit year-on-year. We also continue to grow strongly in many other markets, and again, a special mention to Australia, which was up 12%, the first double-digit NGR growth quarter since 2022, as we continue to see the benefits of new leadership and the fantastic work the team are doing there. International retail, as many of you know, is predominantly Italy sports betting, so this was also impacted by sports results, but we remain very confident in the quality of our estates and future growth opportunities. On Entane CEE, it's again really a story of sports results offsetting healthy volumes in Croatia. Given the product mix weighted particularly to football betting, a minus 7.1 percentage point sports margin track in Croatia pulled NGR growth lower for the quarter. Poland, however, benefited from the migrations to the CEE sportsbook and the revamp of the app. So in summary, we've seen a good start to the year. We've delivered strong volume growth across our markets, and that's allowed us to digest unfavorable sports results. And so we remain firmly on track for our FY26 expectations, but there's plenty more for us to do. I'll now pass to the operator and open the call for your questions.