Flutter Entertainment plc

Good morning and welcome to the Flutter first quarter 2024 earnings call hosted by CEO Peter Jackson and CFO Paul Edgecliff-Johnson. Please note this conference is being recorded and for the duration of the call, your lines will be in listen only. However, you will have the opportunity to ask questions. This can be done by pressing star one on your telephone keypad to register your question. If you require assistance at any point, please press star zero and you will be connected to an operator. I will now hand over to your host, Paul Timms, to begin today's conference.

Hi, everyone, and welcome to Flutter's Q1 2024 results call. With me this morning are Flutter CEO Peter Jackson and CFO Paul Edgecliffe-Johnson. After this short intro, Peter will open up with a brief run-through of our good progress during the quarter, and then Paul will take you through the Q1 financials. We will then open up the lines for Q&A. I would also like to remind you that some of the information we are providing today, including our 2024 guidance, constitutes forward-looking statements under U.S. securities law. The company cautions investors that any forward-looking statement involves risks and uncertainties and is not a guarantee of future performance. There are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. These factors are described under forward-looking statements in our earnings press release, our annual report on Form 10-K, and our upcoming Form 10-Q to be filed with the SEC. In addition, all forward-looking statements are based on current expectations as of the date of this call, and the company undertakes no obligation to publicly update or review any forward-looking statements, whether as a result of new information, future developments, or otherwise, except as required by law. Also, in our remarks or responses to questions, we will discuss non-GAAP financial measures. Reconciliations are included in the results materials we have released today, available in the Investors section of our website. And with that, I will hand you over to Peter. Thank you, Paul.

Before we get into Flutter's excellent performance in the quarter, I first wanted to update you on our US primary listing. As you all have already noted, our proposal to move our primary listing from London to the New York Stock Exchange received overwhelming support at our recent AGM on May the 1st. With this approval now in place, we expect the transition to become effective on May the 31st. This is a key milestone in the natural evolution of Flutter, as Fangio continues to scale rapidly and the US becomes an even greater part of our business. We have now established our operational headquarters in New York, reflecting just how fundamental the US is to our long-term future growth. Moving now to the performance of the business in Q1 2024. I was really pleased with the progress made during the quarter on our strategic objectives. In the US, Fangio is off to a very strong start, consolidating our sports leadership position with a 52% online NGR sports book market share. We also achieved a 27% share in iGaming, where Fangio is now the number one brand. This clear leadership position was delivered through both our leading product offering and our relentless focus on disciplined customer acquisition investment, where our superior structural margins and higher retention rates are delivering payback periods at very attractive levels. Our investment in customer acquisition and product innovation means we are embedding future profits into the business as we continue to scale. The effectiveness of this strategy is reflected in our strong execution during the quarter. Total US amps were 15% higher than the prior year and included a record 2.6 million customers for Super Bowl in February. This includes a 12% year-on-year increase in newly acquired players in pre-2022 states, demonstrating the very strong demand for our Fangio offering in states that have already been open for a number of years. We launched our Fangio Sportsbook product in Vermont and North Carolina during the period, with North Carolina quickly becoming one of our most successful state launches, with an incredible one in 20 adults in North Carolina signing up to be a Fangio customer in the first 45 days. We continue to offer the best customer proposition in the US market, both in terms of the quality of our product and the value given to customers. Our pricing sophistication means we have the highest structural gross win margin, whilst at the same time offering the customers the best pricing in the market. Our product offering is continually evolving, and I'm genuinely excited by the pipeline ahead of us. During the quarter, we added a range of new betting markets on MLB ahead of the new season start, and this has led to a four percentage point increase in the proportion of handle on MLB same game parlays during the first three weeks of the season. In iGaming, we launched more exclusive content, namely the World of Wonka, a very popular title with retail casino customers, which quickly surpassed expectations, becoming the most popular title in our portfolio. I'm delighted with the progress we're making in the US, with the strength and scale of our business making FanDuel the clear number one in the market. As we continue to grow, it is very important that we do that in a sustainable way. Our players are at the heart of our business and our focus is on ensuring that they're able to engage and interact with our products in an entertaining and responsible way. Amy, Christian and the team have been spearheading progress in the US on responsible gaming and setting the gold standard for the industry. Fangio was instrumental in the establishment of the Responsible Online Gaming Association, or ROGA. which we believe will help create the framework needed to support consistent, responsible gaming practices across the industry. Our experience internationally in this area has taught us the importance of taking a proactive approach, and we believe Rogo will provide the industry with the right platform to help drive this forward. Outside of the US, Group X US revenues grew by 8%, driven by UKI and International, and the addition of MaxBet to our International division. which offset the expected declines in Australia, where we have flagged softer racing market dynamics previously. In the UKI, we continue to deliver strong growth, taking significant market share during March, driven by the key Cheltenham Racing Festival, with our iGaming business in particular seeing a continuation of the excellent momentum we had during 2023. We leveraged the power of the Flutter Edge, launching SuperSub on the Paddy Power Sportsbook app, a product that was developed in our international division. SuperSub allows a customer to swap a substitute player into a parlay bet, keeping the bet alive. It's proven incredibly popular, with more than 80% of our Sportsbook customers using the product since launch, and has become the best ever product launch campaign to date for our UKI division. In iGaming, we further expanded our content with the launch of over 100 new titles, driving a step up in cross-sell rates. Moving to international, we are pleased to complete our acquisition of MaxBet in January, and integration has been progressing well. In Italy, CESAL is seeing excellent momentum, delivering market share gains with record amps in March, up 22% compared to March 2023. This is all the more impressive given the challenging prior year comps due to the record super and elotto jackpot, which boosted 2023 player engagement to peak levels in Q1. On Sportsbook, the new CESAL betting app, which launched in Q3 2023, continued to engage customers and drove staking 24% higher in Italy year on year. New iGaming content, including the launch of a free-to-play bonus wheel feature, boosted cross-sell rates. And across our other markets, I've also been really pleased with the growth we've delivered in Georgia and Armenia, Spain, as well as in Brazil. In India, we launched Junglee Poker during the period, and we've seen encouraging levels of player engagement since launch. Overall, the group has produced a strong set of results in Q1. Our U.S. business is a clear number one in the market, delivering an earnings transformation with strong revenue growth and operating leverage, while still enabling us to invest and embed future value in our business. Outside of the U.S., our scaled, diversified portfolio and focus on product innovation continues to underpin growth. And with that, I hand you over to Paul.