Entain plc

Welcome to Entain's Q3 call. I'm delighted to be speaking to you again and sharing another pleasing update on Entain's performance. Joining me today are CFO Michael Snape and our investor relations team. On our call this morning, I'm going to begin with the headlines of our Q3 performance. Mike will then provide more details on trading and our outlook for the rest of 2026. And then we will open it up to your questions. So, turning to the headlines. Endtime performed well during Q3. Not only does it mark our 10th consecutive quarter of online growth, this consistency demonstrates our ever-strengthening operational execution and how that is translating into resilient performance. Importantly, Q3 highlights the strength of our diverse and globally scaled business. Not all markets or results will go our way all of the time. but the breadth of our portfolio and the product offering enables Entain to consistently deliver growth while also navigating headwinds. During Q3, we continue to see broad-based momentum across our business. In the UK, our hard work and investment is driving market share gains and partly offsetting the increased tax burden. Whilst elsewhere, Spain, Canada and New Zealand all continue to deliver double-digit growth. These helped us absorb the headwinds of particularly customer-friendly sports results in August and September, and the ongoing volatility in Brazil. Excluding Brazil, Q3 online NGR grew 5%, driven by volume growth of 7%, affirming the strength of our underlying momentum. BetMGM also continues to perform well. As you heard from Adam and the team earlier this week, they remain focused on their execution and continue to lean into BetMGM's competitive strengths. BetMGM delivered a solid quarter and remains on track with guidance for the year. Across our markets, our continued focus on improved product and customer experiences is driving consistent top-line growth. At the same time, we're making good progress with our initiatives to improve efficiency, increase agility and become better connected to capture our scale advantages. Despite our resilient performance and ongoing optimisation initiatives, our industry is already navigating a more challenging UK tax environment. The speculated further tax hikes, this time on gaming machines, threatens the viability of many of our shops, with significant consequences to jobs, local communities, the UK high street, as well as the racing industry more widely. So whilst we will continue to strongly urge the government to fully consider the broad economic impact of any tax decisions, Ensign must also remain focused on delivering what is in our control. With our strong foundations, global footprint and disciplined allocation of capital, this supports our confidence in delivering our group's guidance for 2026 and sees Entain well positioned to be a long-term industry winner. Thank you. Over to Mike.

Thanks, Stella. Good morning, everybody. As Stella said, we're really pleased with the Q3. It's another quarter that reinforces both the quality and value of our diverse portfolio and that ongoing momentum we're seeing across the group. Turn to the numbers, and as ever, all growth rates are referred to a constant currency. Overall group NGR agreed 2%, with online up 3%, and retail flat on a like-for-like basis. Those headline growth rates belie much stronger on underlying performance, due to both particularly unfavourable sports results weighing on the margin, as well as continued challenges and deliberate actions taken in Brazil, even before the ban introduced in September. Excluding Brazil, online NGR grew 5%, supported by strong volume growth up 7%. Year-to-date, that puts us for OnlineX Brazil up 8%, reassuringly ahead of our 5% to 7% guidance. Coming back to the margin, it was a very different picture for sports and gaming this quarter. Gaming delivered yet another strong quarter, up 8%, so we're very happy with that result and fantastic delivery by the teams. Sports, however, was down 3% due to those sports results. Football in August and September, which more than offset a strong finish to the World Cup in July. As you remember, Q3 lapsed a weak sports margin comp prior year, and the quarter was broadly flat versus that. Compared to a normalised planned margin, Q3 sports results were roughly a 4% drag on the quarter's online growth. Similarly, this was felt in retail, with NGR down 2%, despite volumes being up 2%. To add some colour from the markets, as usual, let's start with the UK and Ireland. UK and Ireland delivered yet another outstanding quarter as we continue to regain market share with online NGR up 14% driven by standout volume growth of 15%. Despite that heavy sports margin impact, online sports were still up 3% while gaming accelerated to 17%. In retail, our UK business continues to be the strongest proposition in the market and an integral part of the high street where we proudly employ over 12,000 colleagues up and down the country. In Q3, NGR was up 3% on a like-for-like basis, as both sport and gaming continued to perform well. That UK performance is a consistent trend, and it's been driven by three things. Improved product, whether that's choice, features or speed. Increased disciplined investment, as we've lent into market turbulence driven by the higher gaming taxes, whilst many others have pulled back. And of course, best-in-class execution. It's strong evidence that our returns-based focus alongside operational excellence is a winning formula. Moving to international, again some really strong performances, weighed down by sports results and of course the ongoing situation in Brazil. Overall NGR was down 4% and online NGR down 3%, reflecting the challenge in Brazil market and customer-friendly football results in Europe. Just as we talked to at the half, even before the shutdown in September, the Brazil performance was a combination of both the market and the deliberate choices we made to not chase unprofitable growth, unlike many of the competition. Excluding Brazil, international online NGR was up 1%, so positive, but still weighed down by those sports results. That margin impact was most pronounced in Italy, where the margin was down more than 3 percentage points year on year. But importantly, volume growth remained strong at 9%. That underlying growth provides a strong foundation to build on as we revitalise the Eurobet brand and strengthen the proposition. We have every confidence that the changes the team are making there will begin to shine through and we see huge opportunities ahead in Italy as an integral part of our portfolio. Elsewhere in the world, Spain, New Zealand, Canada, all up double digit despite those adverse sports results. Australia continues to perform well with online growth in line with expectations. Final mention to Entane CEE which continues to perform strongly with online up 4% alongside double digit volume growth. In summary, we continue to perform in line with expectations through our returns on disciplined investment and operational excellence. Our diverse globally scaled portfolio continues to demonstrate we are well positioned to navigate any regulatory or market volatility and we are focused on controlling what we can control while strengthening the foundations of the business. I want to again emphasize as a final point, behind continued growth and consistent execution, our priorities remain very clear. Optimize our cost base, improve cash generation, strengthen the balance sheet, all with an absolute laser focus on shareholder value. I'll now hand back to the operator for your questions.

Thank you very much. To ask a question, please press star followed by one on your telephone keypad now. And if you change your mind, please press star followed by two. When preparing to ask your question, please ensure that your device is unmuted locally and we kindly ask participants to limit themselves to one question and one follow-up question. We have a question from Ed Young at Morgan Stanley. Ed, you are now live.