Entain plc

Good morning and welcome to Entain's 2026 interim results presentation and I'm delighted to be speaking to you again and sharing another strong set of Entain results. It's been a busy first half with lots of progress across the business. So I will begin with an overview of our first half touching on the highlights of our performance and strategic progress delivered so far this year. I will then hand over to our CFO, Mike Snape, who will provide greater detail on our financial performance and outlook for 2026. Next, you will hear from our Chief Commercial Officers, Andy Hicks and Kerry Sloan, who both will discuss how Entain is winning in the markets and driving growth across the group. Mike will then return to outline the actions we're taking to support this growth, to accelerate operational excellence and deliver shareholder value. And finally, I will conclude with a few closing remarks before we open to take your questions. So, turning to the headlines. Entain has delivered a strong first half performance. Our underlying momentum has continued, with both online and retail performing ahead of expectations. And this now marks online's 9th consecutive quarter of growth, and that's despite tough prior year comparators. The UK, Spain, Canada and Australia and New Zealand were particular highlights, each continuing to deliver double digit growth. Our focused execution and strengthening operations are enhancing both our product and player experiences across the group. The business also performed well during the recent World Cup, a key customer acquisition opportunity for us and I'm delighted that our first time deposits were double those seen in the previous World Cup. alongside this strong performance we're also continuing to make good strategic progress getting sharper and fitter to enable us to digest tax headwinds whilst also becoming more agile in an increasingly better connected global business so we're improving the way that we work and leveraging our scale more effectively This delivers increasing benefits for our customers, colleagues and cost base. Our optimisation initiatives are well underway and our dynamic yet disciplined approach ensures flexibility to invest where we see the best returns. Similarly, this disciplined focus supported our decision to launch our phased exit of Entain CEE. The initial 20% divestment for 425 million euros represents an important step in unlocking value created within our portfolio. So, in summary. We are making strong progress and continue to see good momentum across our business. As a result, we remain confident with our guidance for online growth and Group EBITDA in financial year 2026. Supported by our confidence in our growth trajectory and continuing operational efficiencies, we remain well positioned to deliver $500 million of adjusted cash flow by 2028 and to create long-term value for shareholders. So on that note, let me now hand over to Mike on the H1 financials and trading performance in more detail.

Thank you, Stella. Good morning, everybody. I'm delighted to be presenting my first interim set of results for Entain. As you've already heard, we've had a strong start to 2026. So let's begin with the key financial highlights. As a reminder, growth rates I'll refer to are in constant currency unless stated otherwise. Our reported numbers now exclude CEE, since we announced our 20% divestment and planned exit, though we have included figures including it for clarity as we transition. So, I'm pleased with our strong start to 2026 and the growth we delivered in half one. On a continuing basis, Group NGR was up 5%, with both online and retail performing ahead of expectations. Online was up 7%, with strong volume growth of 9%, sports margins normalising during Q2 following the player-friendly results in Q1 and April. Our iGaming momentum continued and sports also performed well, with strong player engagement across our portfolio during the World Cup. Group EBITDA came in at £479 million, including £7 million of parent fees from BetNGM. On a reported basis, this was down 2% versus last year, as anticipated given the increased UK daming tax, but ahead of expectations given our stronger growth than planned in H1, with our mitigating actions on track. EPS excluding CEE was 20.3 pence with lower EBITDA having a small impact but largely due to lower JV income from BetMGM as well as our ETR increasing. Adjusted cash flow was 43 million up 38 million year-on-year despite the lower EBITDA due to lower capex and interest costs more on that shortly as well as lower separately disclosed items due to the phasing of our transformation program. Net debt remained broadly stable at 3.6 billion, ahead of the receipt from our announced 20% sale of CEE. We reported leverage flat at 3.1 times, whilst leverage including the DPA slightly improved to 3.3 times given our ongoing payments. Finally, we've declared an interim dividend of 10.3 pence per share, an increase of 5% which is consistent with prior years. In terms of segmental performance, with the move of CEE to discontinued operations, we'll continue to report UK and Ireland online, international online and group retail. Let's start with the UK and Ireland. Our biggest online market delivered yet another knockout performance this half as we continue to enhance our proposition. We're continuing to take market share with NGR and volume growth both up 13% and that's double digit growth from both gaming and sports. We're particularly pleased that our momentum accelerated through the half despite lapping strong prior year comparators and adjusting to the higher tax environment and mitigation plans required. This growth has been driven by the ongoing operational improvements, enhancing our product proposition and player experience, alongside continuing optimisation of bonusing. These combined are driving stronger engagement and retention, and more profitable growth. Alongside gaming's 13% growth, Sportsbook was up 11%, benefiting from an upgraded bet builder and a good World Cup. Overall the UK business is in great shape. Profits have inevitably been impacted by the UK tax increase but we are executing well. We remain highly disciplined and our cost mitigations are firmly on track for offsetting the 25% guided to for this year. Moving to international online, we have many success stories but also some challenges, reinforcing the benefits of a diversified portfolio. Overall NGR grew 4% with strong volume growth of 7% but against tough margin comparatives from last year as well as customer friendly results this year, particularly in February and April. Encouragingly, growth improved through Q2 as normalising sports margins supported double digit growth in May and June on a reported basis. In terms of winning markets, Australia was a clear standout performer, up 13%, reflecting the successful reinvigoration of the business, with refreshed brands and improved propositions supporting stronger customer engagement and market share gains. Spain, New Zealand and Canada were also all up double digit. More on this later from Andy and Kerry. As I mentioned, sports margin was a drag and this was most pronounced in Brazil and Italy. In Italy, our continued double digit gaming growth partially offset this and we're confident we'll see a stronger second half. In Brazil, we're facing an intense and challenging regulatory and competitive environment, and we're taking a highly disciplined approach to investment, with a clear focus on returns rather than growth for growth's sake. Although overall growth rates were disappointing, that approach has seen us hold market share, and our player metrics improved through Q2, with H1 sports wages up 10%, supported by sporting bet brand strength and targeted marketing campaigns. We've included the CEE segment here for completeness, however it is now reported as a discontinued operation. Online was up 7% including a strong rebound to 16% in Q2 as Croatia and Poland benefited from a stronger than expected volume and margin uplift during the World Cup. Supersport and STS remain number one in their markets and the business is well placed to grow under Emma Capital's leadership and continue to contribute to our cash flow for as long as we retain our remaining stake in the business. Finishing on retail to complete the picture, the business continues to perform strongly with half one at 1% which was better than planned. Our UK estate remains the best on the high street. NGR was up 3% on a like for like basis and we continue to grow our leadership market share. This is underpinned by our strong brands, leading in-shop cabinets and experiences as well as our strengthened multi-channel proposition. In Italy, the volume-driven growth in retail gives us real confidence in our future potential in this attractive market as we continue to revitalize our Eurobet brand. Moving on to EBITDA for continued operations. EBITDA, including BetMGM parent fee, came in at £479 million. Down year on year as anticipated but ahead of expectations. FX rates did give us a 16 million tailwind, however the increase in UK tax from 21% to 40% in April was a 56 million negative impact to EBITDA in the half. Our strong online performance still added 22 million despite a 32 million year-on-year increase in half-won marketing due to World Cup phasing and targeted investment where we see strong returns. This was also a net of 18 million BAU tax increases across our other international markets. Retail added 7 million year-on-year whilst corporate costs were up 5 million due to phasing. The resilience of our EBITDA demonstrates our structural benefit of a globally scaled and diverse portfolio. Actions we are taking to mitigate 25% of increase in the UK tax this year are firmly on track. Mitigation efforts aside, across the group there is far more we can do on our cost base to improve operational leverage. Let's talk about cash flow. Growth is only valuable if it converts to cash. We see a significant opportunity to step up our cash conversion and target the levers directly within our control, driving down complexity, eliminating cost inefficiencies, and demanding strict returns-based hurdles on every pound we spend. On CapEx, our lower half once spend is not just phasing. It reflects a permanent, returns-led approach to how we allocate capital, allowing us to tighten our FY26 CAPEX guidance today. Separately disclosable items were £21 million favourable year-on-year, relating to restructuring timing. We do expect this to reverse in half too as we progress with our transformation and optimise our cost base as we look ahead to 2027 and beyond. In total for half one, our adjusted cash flow improved to £77 million, which included the net cash flow from our current 67.5% share of CEE. As well as adjusted cash flow, you will see this table highlights underlying operating cash flow, the continuing consolidated earnings after CAPEX lease payments and TABNZ revenue share. I believe this metric gives a clearer, simpler view of how our actions are improving Entane's cash conversion and as such going forward I will talk to this more. Alongside cash conversion, reducing leverage and improving balance sheet flexibility are critical priorities. Our net debt for half one was £3.6 billion, which sees us maintain a broadly stable position despite the increasing UK taxes, supported by our cash flow improvements. Our reported leverage also remained broadly stable at 3.1 times, or 3.3 times including the DPA. However, we are laser focused on our plans to reduce this. As evidenced by our plan to exit Entane CEE, alongside that disciplined approach to investment, we are now taking more decisive corporate actions to improve balance sheet flexibility. Both to de-lever and to unlock the potential to return capital to shareholders. And finally, onto our guidance for this year. Despite the step-up impact of the UK tax increase, where we'll see the full six months in H2 and the challenges in Brazil, I'm pleased to confirm our previous guidance, adjusted for CEE. Having delivered 7% constant currency growth in half 1, and with half 2 starting well, we're confident to reiterate our expectation of this year's online NGL growth growing 5-7% on a constant currency basis. Our online margin guidance of 21-22% is unchanged, and we remain comfortable with EBITDA our consensus. We're also maintaining our guidance on adjusted cash flow, including the remaining 47.5% of CEE. targeting £500 million by 2028, including the contribution from BetMGM, despite the recent change to their medium-term outlook. Finally, on net debt, we expect to end the year below 2025 levels, supported by the proceeds from the 20% CEE stake sale, which remains on track to complete in Q4. Now to add some flavour to the numbers, let's hear from Andy and Curry on how we're executing to drive profitable growth and why Entane can win, not only in each market, but also as a group.

Let's start with the UK. Entain's largest business, which with digital and retail combined generates approximately 40% of the group's revenue. And I'm delighted that both channels are performing strongly and continue to gain market share. Our digital mix illustrates Entain's strong gaming heritage whilst also highlighting the opportunity we have ahead of us in sports. Gaming represents approximately 75% of the UK digital revenue and we are performing really well. Our coin economy strategy is resonating strongly with customers, driving improved engagement, loyalty and value. And in Sportsbook, we've improved our bet builder proposition. We've redesigned the Labricks app, resulting in a step change in customer experience and usability. Now whilst our digital business continues to outperform and take market share in the UK, we remain highly disciplined in our approach to profitability, which is particularly important as our sector digests the increased UK gambling taxes. Our AI supported bonus optimisation reflects this, ensuring our customer generosity is deployed more effectively. All of this helps us generate stronger returns. Retail has outperformed the wider market now for eight consecutive quarters. We have the strongest gaming proposition on the high street, the best cabinets, the best content and afford the customers the very best value. On sports, our proprietary BetStation product continues to exceed expectations and now accounts for over 50% of total sports NGR. In addition, we strengthened our multi-channel proposition, offering an increasingly seamless experience between retail and digital. Looking ahead, I remain highly confident in the prospects for the UK business. Turning to Australia, this is a high quality business undergoing significant transformation in an established and attractive market. With the resulting outperformance and recent market share gains, clear evidence that the actions we're taking there are working. We have a renewed proposition, broadening our appeal beyond racing, improving our relevance to sports fans, enhancing our bet builder and upgrading our native app experience, and our customers are really responding well. The team has successfully applied a similar playbook in New Zealand, where our partnership with Tab continues to go from strength to strength. With more clearly defined positioning, Betcher as a brand is delivering strong double-digit growth. whilst also complementing Tab's established racing heritage. Now looking ahead, the prospect of regulation of the online casino market presents a unique and sizeable opportunity. I am encouraged by the momentum we are building in many of our most important markets. Where we are already market leader, we are extending our advantage. Where we're not yet winning, we are bringing renewed energy, sharper focus and clear plans to improve our position.