Evoke plc

Good morning everyone and thanks for joining us today for our first half 2026 results. I am Per Widerstrom and I'm joined today by Sean Wilkins, our CFO. Starting with the agenda on slide two, the format today is deliberately short. I will begin with a brief overview of the context for today's presentation and the first half performance. Sean will then take you through the financial results and cash flow in a bit more detail before we open the line for questions. Starting with slide three and before getting into the performance I want to briefly discuss the recommended acquisition by Ballast Intralot which we announced a little over two months ago. The announcement followed a comprehensive strategic review initiated by the board The board concluded that the recommended acquisition represented the most attractive and deliverable proposal available to Vogue and its shareholders. The acquisition remains subject to the relevant shareholder regulatory and other approvals including our own shareholder vote next Monday the 17th of August. I am pleased to tell you that progress with the relevant filings is going to plan and we still expect to complete in the fourth quarter of 2026 or the first quarter of 2027. As a result we are keeping Financial Guidance and during the Q&A we won't be able to add anything on the transaction beyond the information contained in a published announcement and other form of documentation. Operationally our priorities are unchanged. We remain focused on maintaining momentum, serving our customers, supporting our colleagues, meeting our regulatory obligations and managing the business with discipline through the completion of the transaction. Turning to slide four and the first half performance. This was a period that really demonstrated the resilience of the underlying business in what was materially more challenging external environment in terms of increased duties in several of our core markets and most notably in the UK. Group revenue was stable at 888 million pounds and increased by 2% on a like for like basis accounting for the 270 store closures versus the prior year. In terms of profitability, the first half had 46 million pounds year-on-year headwind from increased gaming duties. Against that backdrop, adjusted EBIT of 150 million pounds was down 10%. By down 16 million year-on-year, the result also shows that mitigating actions we set out early in the year are working and are offsetting a meaningful part of the duty impact. The second quarter saw a continuation of the Q1 trends. We outlined that there were full year results and Q1 update, with the strongest performance coming from UK and Ireland online. Revenue grew 4% and adjusted April increased 28%. This despite the additional duties kicking in from April. William Hill Vegas continues to perform very well, supported by the change we have made to marketing, promotion investment, and customer value to produce better returns. Retail are also making good progress. Like-for-like revenue grew 4% and adjusted EBITDA increased 5% despite smaller estate and continuing inflationary cost pressure. The closure of structured loss-making shops has improved the economics of the remaining estate, while trading following a machine rollout and improvements to self-service betting terminals has been encouraging. International was more mixed. Italy and Denmark continued to grow strongly, but that was offset by weaker revenue in Spain, Romania, and the rest of the world. Profitability was also affected by duty increases in Romania and Italy, and by a greater proportion of revenue coming from higher duty markets. We had plans in place to address several of these areas, and in Spain, for example, we have made significant product improvements recently, although these had only limited impact on the first half results. Overall, the business has responded decisively to a substantial increase in our cost base. Our focus remains on the areas we control, commercial efficiency, cost discipline, cash generation, and consistent operation execution. I will now hand over to Sean to go through the financials.

Thanks, Per. Turning to slide six, I'll now take you through the financial performance for the first half in a bit more detail. Firstly, I'd say performance overall has been in line with our expectations, so it's been a decent start to the year, all things considered. That said, the story continues to be mixed across markets and brands, driven by the actions we've been taking to drive growth and improve profitability. Total online revenue increased 1%. Within that, UKNI online grew 4%, with gaming up 7%. William Hill remained the key driver, particularly gaming, where William Hill Vegas continues to grow double digits and go from strength to strength. 888 revenue continued to decline as we maintained a deliberate focus on profitability and customer economics rather than pursuing low return volume. International revenue declined 2%, but the picture varied significantly by market. Italy delivered another strong period with revenue up 21% and Denmark grew 13%. These performances were offset by declines in Spain, Romania and the rest of the world. In Spain, the improvements made to product and marketing are taking time to translate into the level of performance we want. Romania continues to be affected by the combination of a weaker economy, higher taxes and the growth of the unregulated market. We have responded by managing marketing and promotional investment carefully to protect returns Retail revenue declined 3% on a reported basis, reflecting the smaller estate with 270 fewer shops than the prior year On a like for like basis, revenue increased 4%, supported by the continued strength of the gaming machines and improvements to self-service betting terminals, including 2,000 new ones being installed, leading to good underlying market share trends. Turning to adjusted EBITDA, the group delivered £150 million down £16 million year on year and broadly flat across the operating segments, excluding the increase in corporate costs, most of which is bonus accrual and balance sheet timing. This is despite the significant headwind of an additional £46 million in gaming duty costs year on year. Our original guidance was that we would offset around half of that gross headwind. In the first half, we've actually offset more than half of the headwind, albeit the UK changes were only effective from the 1st of April. We've achieved this through lower but more productive marketing investment, improved promotional efficiency and operational cost savings. You really see the impact of our mitigation efforts in the UK and I online adjusted EBITDA, which increased 28% despite the duty headwind. The full detail is in the appendix, but we have seen good savings across both marketing and operating costs, driving a much more efficient operation. International is where we are more disappointed with the start-up to the year, with adjusted EBITDA down 20%. The reduction was driven primarily by the higher duty rates in Romania and Italy, the shift in revenue mix towards higher duty markets, and weaker revenue in several markets. While these external factors have compressed gross margin, it nevertheless remains the highest margin of the group's segments, supported by leading positions in several attractive regulated markets. Retail adjusted EBITDA increased 5% despite the reported revenue decline and ongoing wage and cost inflation. The decision to close shops is never taken lightly. However, in the current external environment, it was necessary to address structurally loss-making locations. The performance of the remaining estate demonstrates the benefits of concentrating resources on a more productive shop portfolio. Corporate costs increased to £26 million, with the largest drivers being staff bonus accruals compared with no accrual in the prior year period, together with the timing of certain balance sheet movements in both the prior year and current year. The bonus accrual will ultimately reflect the relevant full year performance outcome. We're not commenting on current trading post period end, other than to say we continue to trade in line with our expectations. Clearly one call out worth making is on the World Cup, which was really successful from an operational point of view in terms of product delivery, commercial plans and driving customer engagement. It also exceeded our revenue expectations and provided a good springboard as we go into the upcoming football season. Turning to slide 7 and our cash flow. This is our usual bridge, taking you from opening to closing cash, excluding customer balances. The business generated £85 million of underlying free cash flow in the period, but with exceptionals and other one-off outflows, net debt increased by approximately £37 million. Together with a lower LTM EBITDA, this meant leverage was up to 5.6 times. Touching on a few of the key moving items. Working capital was a £14 million inflow, primarily reflecting higher gaming duty accruals, with UK duty paid quarterly in arrears. CAPEX of £51 million was slightly front-loaded given the Retail Closure Programme and some of our product investment, and will continue to be disciplined in terms of capital allocation as we go through the year, ensuring we see sufficient ROI on our plans. Exceptional costs of £27 million include £5 million for Retail Closure Programme and £7 million for the Strategic Review, as well as the ongoing Integration and Transformation Programme we've discussed before. Within other, this includes the repayment at par of the remaining £11 million outstanding on the 2026 William Hill bonds, together with the ongoing TLB amortisation of around £2 million. We also paid £11 million in relation to the historic Austrian gaming tax liability, where the final assessments have now been made and the remaining balance is currently being paid at approximately £2 million per month. At the period end, cash was £106 million and the group had £43 million of undrawn RCF capacity, giving total liquidity of approximately £150 million. As Per said, we will be disciplined with our capital allocation and focused on cash generation and balance sheet strength as we move through to completion. Finally, just to say, I think this slide and the increase in leverage really illustrates the constraints created by the group's existing capital structure, particularly following the significant increase in gaming duties. The board considered these constraints carefully as part of the strategic review, alongside the investment required to continue improving the operating performance of the business. The recommended acquisition provides a clearer path to a more sustainable capital structure, which was an important factor in the board's unanimous recommendation. With that, we'll move to Q&A.

Thank you. As a reminder, if you'd like to ask a question, please click the question box on the bottom of the webcast. Our first question from today is from Ricardo Chinchilla at Deutsche Bank. UK and Ireland online EBITDA increased 28% despite materially higher gaming duties. Could you quantify the contribution from revenue growth, marketing optimisation and operational efficiencies within that bridge? And secondly, international EBITDA declined 20% while revenue was only down 2%. Which specific geographies contributed most significantly to the margin compression beyond Italy and Romania duty increases?

Thanks for that question. UK Online, EBITDA, obviously we were very pleased with the performance there, adding 17 million year on year. The main places that came from, in spite of The headwinds of UK duty. We saw 4% revenue growth and we saw good operational gearing on that. But we also I think did a very good job in the first half of mitigating the duty increases. And the areas that we've really focused on to achieve those mitigations include significantly more effective marketing. Now, our marketing year on year has dropped, but we've still managed to get that 4% growth. And that demonstrates the thing that, you know, we've been much more efficient. This hasn't just been a cost cutting exercise. So we're very pleased with that as an outcome. The second thing basically focused on is retail closure. You know, we we've shot 70 stores in Q4 last year, 200 stores in Q1 this year. And they were all loss making stores. And so you can see in the results that retails are improved. We've improved the customer proposition and we've also reduced our overhead. So all of those things have allowed us to mitigate the impact of the UK duty and allowed us to achieve a good result in UK Online. In international, I think the question is about Margin compression. Where have we seen margin compression? I think there's been probably three key elements to this. The first is Italy duty, which we saw increase in November last year. And then the second is Romania duty, which took a step up from 21% to 30%. And I think, you know, the third thing that's driving margin compression is that we've seen a changing mix of revenue to the higher duty and therefore lower gross profit areas, particularly with the extremely strong growth in Denmark and Italy. Our volumes have moved over to the higher duty markets. and those three things are the things that are driving margin compression across the international business. I think Ricardo had some more questions didn't he Josh?

Next, William Hill Gaming remains the standout performer. What proportion of UK and Ireland growth is being driven by existing customer monetisation versus new customer acquisition and how are cohort economics trending? Group AMAs declined 6% year on year, yet revenue remained broadly stable. To what extent are you consciously trading customer volumes for higher value and more profitable players?

um so first question William Hill Vegas is it coming from existing or new customers the honest truth is both which is good news obviously. It's been a good opportunity. I know that the World Cup is a sports event, not a gaming event but clearly it's new customers to us and that proved successful to us in terms of us recruiting new customers and those customers certainly get cross-sold onto the gaming. So we've seen both improvements in existing cohorts and new customers. In terms of actives, yes, we have seen that decline across the group. I think a couple of things driving that. One is we saw some difficult performance across a couple of our markets. you know particularly Romania and Spain. Romania has been impacted by significant external events the increase in duty leakage to the black market plus economic negative growth and Spain continued to struggle with product there although the product has improved significantly over the last quarter. So two reasons there why Activis has gone down but I think the third thing and you alluded to it in the question is you know we are working extremely hard and we have been actually it's been a key part of our strategy to make sure that we're getting significant value from our players and that we're driving ARPU and that we're also driving margin within driving ARPU and those things have been effective we've had this strategy in place now for three years and it's it's definitely paying dividend and it is you know the the inference in the question is you know are we focused on on driving higher value from from existing players now absolutely of course we are you know number one on our strategic pillars was always customer life cycle management and this is at the heart of customer life cycle management there's a fifth isn't there is there a fifth there

Yes, sportsbook stakes declined 9%, but sportsbook margin increased 60 basis points to 13.3%. How much of the margin expansion reflects favourable sporting outcomes versus structural improvements in pricing, product and risk management?

Look, I don't... My view is there wasn't any particular sporting luck factor in this. We have intentionally been focused on the higher margin products, particularly Acker's and BetBuilder's. We've very significantly improved the product that we've got, particularly in the UK, but also international around Acker and BetBuilder and higher margin products. And so it's no surprise to us at all that the margin on Sportsbook has increased.

Thank you. The next question is from David Brohan from Good Body. Could you quantify the impact of the increased duties in Italy and what is your view on potential future regulatory tax pressures in the UK, specifically the impact of FRAs and the proposal of increased MGD in retail?

Why don't I take the first part of that and then I think Per is probably going to take the second part on the outlook for FRAs. and we're not really Dave we're not really talking about second half and guidance but I can tell you what the impact in the first half was and it was it was nearly a 10 million impact on on EBIT data so we've been public about 46 million impact of duty changes we think 10 million of that came through the Italy duty change. Per do you want to comment on the FRAs?

Yes, I can comment on that. So the Agenda Commission has announced the implementation of FRAs and it has recently made that announcement. It's going to be implemented through a stage process which we do expect to be kicked off in immediate short term. What the Commission Thank you very much. and likewise it's not going to have a detrimental impact from a customer experience and likewise the regulated market so we are actively taking part and will take part in the development of FRAs in the UK market but it will happen and we are getting ready to introduce that.

Thank you. Our next question is from Raman Narula from Principal Asset. Several, please. First, run rate savings from store closures completed. How many more store closures anticipated? Second, last year saw WC outflow of circa 51 million. Expect this to fully reverse this year and FYWC to be positive. And third, what percent of LTM revenue is Spain and Romania, respectively?

Okay, I mean, look, the place to look for run rates savings on store closures, as you can see that much as our revenue has dropped our EBITDA in retailers improved by 5%. That's the way that we think about it. So what we've done is we've cut out loss making stores. And that's meant that we're more profitable in spite of having having lower revenue. The other point here is, We've seen very strong like for like. So if you forget the stores or ring fence out the stores that we've shut, the like for like in the more profitable stores has been really strong. We've seen 4% like for like in retail and that's significantly above the market. So we're pleased with that. working capital yeah so positive working capital for the first half which again we're pleased pleased with compared to last year we're not giving forward guidance on cash flow so the one thing I would say though of course is that you know you're quarterly duty payments are paid coarsely in arrears and so that increase in the quarterly payment in Q4 is going to be paid in Q1 following year so I would absolutely expect to see a good positive working capital number LTM in Spain and LTM revenue in Spain and Romania is not really a level of detail I wanted to get into today

The next question is from Joe Moxham from Chepstow Lane. On the international side, can you talk about the path to improving performance in some of the geographies, Spain and rest of the world perhaps, Romania perhaps a bit more obvious given the duties?

Let me start with that one, Sean, and then you can chip in.

We have some product issues related to the sports side.

We have seen a good response from a customer's perspective when it comes to the new William Hill app that we have launched. We have, in fact, moved some resources from the UK in order to further scale up and accelerate the product and tech roadmap for Spain. We also have implemented in H1 related to Spain in terms of marketing improvements, including also customised commercial improvements, which is yet to be seen coming into effect. We expect that to happen in H2. In terms of Romania, I mean, we do see that this is an overall weak market and in particular hit by the increased taxation. We are absolutely focused on making sure that we are preserving the cash and liquidity in all the markets, including Romania. So that is what we continue to do by, of course, continue to focus on the product and the customer position to the customer. In terms of the rest of the world, I think the key message here is that we are absolutely focused on when it comes to profitable growth and when it comes to cash flow preservation. So rather than invest in the markets where we have a higher return on investment.

Thank you. Our next question is from Monica Reacher at JPM AM. Can you give us a sense of the impact of the World Cup on the top line? How has Q3 trading been so far?

So we are not giving any specific financial figures related to the World Cup, but Sean called it out. commercial execution of what we delivered to the customer during the World Cup. By the way, fantastic tournament, I must say. And we have seen a customer engagement that was overperforming versus the expectations we set out before the tournament started. And that also follows an overperformance when it comes to revenue projections. What we did see also was that when it comes to the group stage results, which is of course part of the H1 results we call out today, the results were a bit more customer friendly in June, while we saw that in the knockout stages it was a bit more casual. Obviously less games, but overall, very, very happy with the performance by the team, delivering great customer experience to the customers during the World Cup. And when we, as we said, we are not giving any financial forward looking outline, but what we can say we are performing according to expectations when it comes to where we stand today.

Thank you. As a reminder, if you'd like to ask a question today, please use the questions button in the toolbar below. Our next question is from Connor Porter from SBC. Adjusted EBITDA was impacted by a £46 million year-on-year increase in gaming duties, predominantly in the UK. How much or what percentage of the £46 million figure was from the UK exactly? How close is this to initial estimates?

so um well two-thirds of it was from the uk so uk was 30 million of that 46 million i've already told you that italy was you know circa 10 which means rest is from rest is really from Romania. In terms of it being close to estimates I mean I think we're pretty well spot on is it's not an enormously difficult thing to work out so you know we our estimates were pretty well bang on there. The other thing that's just worth saying when you're thinking about this, clearly the UK only had one additional quarter within the half of increased duty.

Thank you. At this moment, we have no further questions, so I hand back to the management team for closing remarks.

Thank you so much. To close then, the first half demonstrated their ceilings of evoke in a materially more challenging operating environment. Despite significant increases in gaming duties, particularly in the UK, we acted decisively, maintained operational momentum, and delivered a like-for-like revenue growth and protected profitability and cash generation. Following the board's strategic review, we believe the recommended acquisition by Bally's Intralot represents the most attractive and deliverable outcome for shareholders, this while providing the business with a stronger long-term capital structure. Until completion, let's be clear, our focus remains unchanged, serving our customers, supporting our colleagues and executing with discipline and continue to generate strong cash flow. I would like to thank you all for your time today and for your questions today. Have a good day.