Flutter Entertainment plc

Good morning, everyone, and thank you for joining our Q3 trading update call. With me this morning is Paul Edgcliffe-Johnson, our CFO. Hopefully, you've had a chance to review our statement this morning. Firstly, I'd like to talk to you about some important developments of the group before Paul will take you through the Q3 numbers. We've had another strong quarter with revenue growth of 13% despite customer-friendly sports results. In the US, Fangio maintained its leadership position and has started the new NFL season with great momentum, following the lull in the sports calendar across the summer. Ahead of the new NFL season, the team has delivered a multitude of new product innovations for customers to sustain our product leadership in the market. These include market-leading new products that react to trending action by allowing customers to bet on the most compelling in-play action, and expanding our range of player prop markets for in-play bettors. where we continue to offer the widest proposition in the market. We've further enhanced our promotional toolkit by launching profit-boost tokens, a mechanic that's proven very successful for Flutter in other markets, providing us with greater optionality for how we reward our players. These innovations have landed well with players, and the pipeline of further innovation remains strong. This has resulted in FanDuel maintaining its market leadership with a 47% NGR share, including a 55% share in September following the resumption of the NFL, in line with our year-to-date NGR share of 52%. In iGaming, last year we outlined our strategy to improve our proposition for casino players. We've been making significant improvements across our product offering and promotional capabilities, which are delivering excellent results. Fangio is the fastest-growing gaming brand and is now the number two in the market, and we are confident of taking further share. Our US business is in a great position as we head into the key months of the sporting year. Fangio will be the first operator to deliver full-year profitability, and our continued high level of investment in player acquisition and compelling returns will drive a ramp in profits into 2024 and beyond. In the group outside of the US, we've continued to deliver growth in line with our 5% to 10% revenue framework, despite some headwinds. In the UK and I, the business is performing exceptionally strongly, with our brands delivering new and engaging products to our players. We've led the industry in taking proactive actions on safer gambling, and we look forward to working with both government and the Gambling Commission on the white paper conversations. The combination of a highly recreational player base and strong product propositions is driving market share gains. In international, we hosted sell-side analysts in Milan last month to give them a deeper understanding of the opportunity that exists in our international markets, and the slides are available on our website. MaxBet, the local hero acquisition we announced in September, is giving us an exciting platform to grow in the Balkans. repeating our proven strategy of acquiring the best local player and improving its growth and profitability through the Flutter Edge. In Australia, where we remain the clear number one operator, the racing market has continued to be soft, albeit still well ahead of pre-COVID levels. This softness, combined with increased regulation and taxes, is resulting in a greater revenue impact than we previously anticipated. Sportsbet has a fantastic position in the market and we are focused on maintaining its leadership for when the market returns to growth. Lastly, on our proposed additional US listing, we have submitted a draft registration statement to the SEC and look forward to engaging with their review process over the coming weeks. We've chosen to list on the New York Stock Exchange and expect this to become effective in Q1 2024. As a consequence, we'll cancel our UNX listings. We recognise this may impact certain shareholders and we've provided details on our website which will hopefully answer all your questions. We'll provide a more specific timeline for the UNXD listing and US listing in due course. And with that, I'll hand you over to Paul.

Thanks, Peter, and good morning, everyone. As Peter outlined, Q3 was another strong quarter for the group. We added over 1.5 million new players, up 16% year-on-year, which translated into 13% revenue growth. In sports, customer favourable outcomes in Premier League and European football were a 12 percentage point headwind to revenue growth in the quarter, taking it from a 16% to a 4% increase. Gaming is performing exceptionally well, with double digit growth in all divisions, driven by delivering compelling content to our players and cross-selling sports-led players to gaming. Turning to the divisions. And in the US, revenue grew 20% despite a 170 basis point swing in net revenue margin due to lapping favourable sports results in the prior year. In Sportsbook, revenue increased 12% with strong staking growth of 38% being offset by the swing in sports results year on year. The product improvements Peter noted earlier are driving significant structural gross win margin increases up by 80 basis points versus Q3 last year. In casino, strong delivery against our gaming strategy resulted in 52% revenue growth, taking us to a 23% share of the market. We continue to make significant investments in customer acquisition, driving a 37% increase in new sportsbook and casino players in the quarter. When combined with significant operating leverage in future years, we are well set for continued strong growth in both revenue and profitability. In the Group X US, revenue increased 5% on a pro forma basis, with good momentum in the UK and I and international partly offset by a softer Australian market. In the UK and I, revenue increased 11% due to strong growth in gaming and expansion in our structural sportsbook revenue margin from greater adoption of bet builder products. In Australia, revenue declined 7% despite AMP growth of 2%. I'll touch more on the outlook for the Australian market later. Finally, in international, our high-growth consolidate and invest markets, which make up 78% of the division, grew 11% in the quarter, and the division as a whole by 5%. Turning now to the outlook for the rest of the year. Fanjul is expected to be the first sports betting net operator to deliver a full-year profit in the US with adjusted EBITDA of approximately $180 million in 2023 from revenue of approximately $4.7 billion. This would represent a near 50% increase in revenue year-on-year and a near $500 million swing in profitability. The profitability ramp will continue in 2024 and beyond, driven by significant top-line growth and material expansion of our profit margins. In the Group X US, adjusted EBITDA is expected to be approximately £1.44 billion. This expectation reflects the midpoint of our prior guidance range adjusted for £50 million of adverse sports results and £30 million of foreign exchange movements. The strong underlying momentum in our UK and our international divisions is offsetting the Australian headwind, showing the benefits of our diversified portfolio. Whilst it's difficult to read the market so far ahead, our expectation is that the softer Australian market will continue into 2024 with a single mid-digit decline, which will now limit our ability in the near term to offset the impact of the previously announced Victoria point of consumption tax increase. In India, a very exciting market for the group, where we're well positioned with our Rummy brand, Junglee, the previously announced changes to GST from 18% on GGR to 28% on deposits is expected to result in 2024's profits growing 30 million sterling, less than we had anticipated, and will likely push out the ramp in profitability from getting to a scale position by one to two years. We are also investing in the group capabilities to ensure we truly harness the power of the Flutter Edge, and this combined with U.S. listing associated costs will see growth in our corporate cost base. So, in summary, we're very pleased with the ongoing growth trajectory of the group, and in particular, the strong player growth and structural margin increases we are achieving sets us up well for enduring profitable growth. The exciting trajectory of growth of our U.S. business is on track to transform the earnings profile of the group, which in turn will provide us with significant financial flexibility. I'll now hand you back to Peter.

Thank you, Paul. And with that, we'll turn it over to questions. As this is a quarterly update, we'll be keeping the Q&A section to around 30 minutes. So we'd ask you to limit your questions to two to give everyone a fair chance. With your amount of time, the IR team are on hand to help with any questions you may have. Courtney, back over to you.