2014 final results presentation 27 February 2015 James Henderson, - - PowerPoint PPT Presentation

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2014 final results presentation

27 February 2015 James Henderson, CEO Neil Cooper, Group Finance Director

19 times Champion Jockey AP McCoy has announced his retirement in 2015. Small pictures, top to bottom: entering the parade ring on Carlingford Lough after winning the Hennessy Gold Cup during the Hennessy Gold Cup Day at Leopardstown Racecourse, Ireland, February 2015; and on Binocular on his way to victory in the williamhill.com Christmas Hurdle Race, January 2011

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This presentation has been prepared by William Hill PLC (“William Hill”). This presentation includes statements that are,

• r may be deemed to be, “forward-looking statements”. These forward-looking statements can be identified by the use
• f forward-looking terminology, including the terms "believes", "estimates", "anticipates", "expects", "intends", "plans",

"goal", "target", "aim", "may", "will", "would", "could" or "should" or, in each case, their negative or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this presentation and the information incorporated by reference into this presentation, and include statements regarding the intentions, beliefs or current expectations of the directors, William Hill or the Group concerning, amongst other things, the results of operations, financial condition, liquidity, prospects, growth, strategies and dividend policy of William Hill and the industry in which it operates. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend

• n circumstances that may or may not occur in the future and may be beyond William Hill's ability to control or predict.

Forward-looking statements are not guarantees of future performance and hence may prove to be erroneous. The Group's actual results of operations, financial condition, liquidity, dividend policy and the development of the industry in which it operates may differ materially from the impression created by the forward-looking statements contained in this presentation and/or the information incorporated by reference into this presentation. In addition, even if the results of

• perations, financial condition, liquidity and dividend policy of the Group and the development of the industry in which it
• perates are consistent with the forward-looking statements contained in this presentation

and/or the information incorporated by reference into this presentation, those results or developments may not be indicative of results or developments in subsequent periods. Other than in accordance with its legal or regulatory obligations (including under the Listing Rules, the Disclosure and Transparency Rules and the Prospectus Rules), William Hill does not undertake any obligation to update or revise publicly any forward-looking statement, whether as a result of new information, future events or otherwise.

Disclaimer

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2014: a record year

£372.2m 40% 18%

276.8 275.7 330.6 335.0 372.2 2010 2011 2012 2013 2014

Record operating profit1, up 11%

• f net revenue from

digital businesses2

• f net revenue from

international markets

61% 57% 30% 32% 6% 8% 3% 2013 2014 Retail Online Australia Other 3% 85% 82% 15% 18% 2013 2014 UK Non-UK 1. Operating profit/loss is defined as pre-exceptional profit/loss before interest and tax, and the amortisation

• f specific identified intangible assets recognised on acquisitions

2. Online and William Hill Australia

World Cup

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Neil Cooper

2014 financial results

My Tent Or Yours ridden by Tony McCoy wins the williamhill.com Christmas Hurdle Race during Day One of the William Hill Winter Festival at Kempton Park Racecourse, December 2013

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A year of record operating profit

52 weeks ended 30 Dec 2014 £m 52 weeks ended 31 Dec 2013 £m % Change

Amounts wagered1 8,945.7 7,800.8 +15% Net revenue 1,609.3 1,486.5 +8% Operating profit2 372.2 335.0 +11% Amortisation (9.0) (10.9)

• 17%

Net finance costs (45.9) (44.3) +4% Tax (63.1) (32.2) +96% Non-controlling interest

• (15.3)
• Retained profit

254.2 232.3 +9% Basic, adjusted EPS (p)3 29.9 28.8 +4% Net debt for covenant purposes 602.8 796.0

• 24%

Dividend per share (p) 12.2 11.6 +5%

Numbers are presented on a pre-exceptional basis. 1. Amounts wagered comprises the gross takings in OTC, Telephone, US, Australia and Online Sportsbook, and net revenue in Retail gaming machines and Online gaming products. 2. Operating profit is defined as pre-exceptional profit before interest and tax, before the amortisation of specific intangible assets recognised on acquisitions. 3. Basic, adjusted EPS is based on profit for the period before exceptional items and before the amortisation of specific intangible assets arising on acquisitions.

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52 weeks ended 30 Dec 2014 £m 52 weeks ended 31 Dec 2013 £m

Accelerated Australian brand amortisation (44.5)

• One-off shop portfolio closure

(19.4)

• European indirect taxation provision

(9.7)

• tomwaterhouse.com integration

(3.3) (2.0) Revaluation of tomwaterhouse.com earn-out (2.2)

• Write-off of unamortised finance fees

(2.0)

• Write-off of fees on bridge loan
• (1.7)

Australia management restructuring cost (1.8)

• Repayment of VAT refund and interest

(0.5) (5.6) Sportingbet acquisition and integration

• (13.5)

Pre-tax (83.4) (22.8) Release of tax provision 15.4

• Tax consequence of exceptional items

20.1 1.7 Post-tax (47.9) (21.1)

Exceptional items

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Retail gaming growth and strong cost control mitigate OTC margin decline

1. Adjusting for the Machine Games Duty effect, Retail net revenue was flat. 2. Operating profit is defined as pre-exceptional profit before interest and tax, before the amortisation of specific intangible assets recognised on acquisitions.

52 weeks ended 30 Dec 2014 £m 52 weeks ended 31 Dec 2013 £m % Change

OTC amounts wagered 2,452.2 2,439.9 +1% OTC gross win 449.7 472.8

• 5%

OTC gross win margin 18.3% 19.4%

• 1.1 ppts

Machines gross win 461.8 440.0 +5% Total gross win 911.5 912.8

• 0%

Net revenue1 911.4 907.0 +0% Cost of sales (209.9) (203.3) +3% Gross profit 701.5 703.7

• 0%

Operating costs (508.3) (507.4) +0% Operating profit2 193.2 196.3

• 2%

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Retail OTC wagering and margin trends

Amounts wagered: H1 2014 v H1 2013 Amounts wagered: H2 2014 v H2 2013 Gross win margin: full year trend

• 3%
• 5%

35%

• 1%

2%

• 10%

0% 10% 20% 30% 40%

% Change in amounts wagered

Horseracing Greyhounds Football Other Total

• 1%
• 5%

0% 3%

• 1%
• 6%
• 4%
• 2%

0% 2% 4%

% change in amounts wagered

Horseracing Greyhounds Football Other Total

0% 5% 10% 15% 20% 25% 30% 35%

Retail gross win margin

2014 2013

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Retail gross win per machine shows good growth

1. Compared with 52 weeks of 2012

52 weeks ended 30 Dec 2014 52 weeks ended 31 Dec 2013 % Change

Average number of LBOs 2,406 2,401 +0% Average number of machines 9,458 9,431 +0% Machine density 3.93 3.93

• Gross win per machine per week

£939 £897 +5% Machine gross win margin 3.44% 3.37% +0.07 ppts

4.8% 4.3% 7.6% 3.3% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 109 110 111 112 113 114 115 116 117 118 Q1 2014 Q2 2014 Q3 2014 Q4 2014 £m Machine quarterly gross win growth Gross win Growth % (2014 v 2013)

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52 weeks ended 30 Dec 2014 £m 52 weeks ended 31 Dec 2013 £m % Change

Employee costs (195.2) (199.9)

• 2%

Property costs (101.4) (102.8)

• 1%

Content costs (70.2) (64.3) +9% Depreciation (29.5) (28.4) +4% Other costs incl. recharges (112.0) (112.0)

• Operating costs

(508.3) (507.4) +0%

Retail demonstrates good cost control

507.4 508.3 0.8 5.3 1.1 0.3 8.6 (4.3) (2.6) (1.3) (7.0) 490 492 494 496 498 500 502 504 506 508 510 £m Retail cost causal

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Online revenue growth from both Sportsbook and Casino

52 weeks ended 30 Dec 2014 £m 52 weeks ended 31 Dec 2013 £m % Change

Sportsbook 253.3 212.9 +19%

Casino 235.5 191.0 +23% Poker 14.9 18.2

• 18%

Bingo 23.7 24.2

• 2%

Gaming net revenue 274.1 233.4 +17% Net revenue 527.4 446.3 +18% Cost of sales (51.0) (40.2) +27% Gross profit 476.4 406.1 +17% Operating costs (298.7) (258.3) +16% Operating profit1 177.7 147.8 +20%

1. Operating profit is defined as pre-exceptional profit before interest and tax, before the amortisation of specific intangible assets recognised on acquisitions.

74% 5% 4% 17% 2014 Online net revenue by geographic split UK Italy Spain Other

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Online wagering increased, pre-match margins weaker

52 weeks ended 30 Dec 2014 52 weeks ended 31 Dec 2013 % Change

Unique active players (’000)1 2,467.9 2,360.7 +5% Revenue per unique active player (£) 213.7 189.1 +13% New accounts (’000)2 1,225.2 1,141.0 +7% Average cost per acquisition (£)3 107.8 107.4 +0% Sportsbook amounts wagered (£m) 3,758.2 2,931.7 +28%

• Pre-match amounts wagered (£m)

2,116.1 1,724.5 +23%

• In-play amounts wagered (£m)

1,642.1 1,207.2 +36% Sportsbook gross win margin 7.6% 8.1%

• 0.5 ppts
• Pre-match gross win margin

9.3% 10.0%

• 0.7 ppts
• In-play gross win margin

5.3% 5.3%

• 1. Placed a bet within the period
• 2. Registered and transacted within the period
• 3. Including affiliates

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52 weeks ended 30 Dec 2014 £m 52 weeks ended 31 Dec 2013 £m % Change

Employee costs (53.0) (45.1) +18% Marketing (132.1) (122.5) +8% Finance charges (20.3) (16.6) +22%

• Depr. and amortisation1

(26.6) (18.9) +41% Other costs incl. recharges (66.7) (55.2) +21% Operating costs (298.7) (258.3) +16%

1. Excludes £1.3m of Online amortisation relating to acquired intangibles (2013: £4.0m)

Business expansion drives cost base expansion

• Sportsbook free bets / amounts wagered ratio 0.8%
• Marketing / net revenue ratio 25%

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Doubling of Australian profit

52 weeks ended 30 Dec 2014 £m 41 weeks ended 31 Dec 2013 £m % Change Pro-forma local currency change %

Amounts wagered 1,388.7 1,177.1 +18% +0% Gross win 129.4 92.5 +40% +12% Win margin 9.3% 7.9% +1.4ppts +1.0 ppts Net revenue 121.9 86.7 +41% +11% Cost of sales (30.1) (20.2) +49% +19% Gross profit 91.8 66.5 +38% +9% Operating costs (67.1) (54.5) +23%

• 8%

Operating profit1 24.7 12.0 +106% +121% Unique active players (’000) 324.0 247.9 +31% +15% Revenue per unique active (£) 376.2 349.7 +8%

• 3%

New accounts (’000) 142.1 95.9 +48% +4% Average cost per acquisition (£) 192.5 298.7

• 36%
• 25%

1. Operating profit is defined as pre-exceptional profit before interest and tax, before the amortisation of specific intangible assets recognised on acquisitions.

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Good progress but Australian returns lag expectation

• Achievements to date

– Systems upgrades – tomwaterhouse.com (TW) purchase and integration – Management restructure – Marketing mix rebalanced, CPA lowered

• Rebranding has commenced
• Headwinds

– Currency – Race field fees

• Now expect returns of Sportingbet and TW taken together to exceed

WACC by 2018

– Previous guidance of 2016, inclusive of TW – Earnings enhancing from 2014

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William Hill US

1. Operating profit is defined as pre-exceptional profit before interest and tax, before the amortisation of specific intangible assets recognised on acquisitions.

52 weeks ended 30 Dec 2014 £m 52 weeks ended 31 Dec 2013 £m % Change Local currency % change

Amounts wagered 375.7 310.2 +21% +27% Gross win margin 7.9% 7.3% +0.6 ppts +0.6 ppts Net revenue 29.7 22.7 +31% +36% Cost of sales (2.5) (2.0) +25% +32% Gross profit 27.2 20.7 +31% +36% Operating costs (17.5) (15.8) +11% +16% Operating profit1 9.7 4.9 +98% +99%

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52 weeks ended 30 Dec 2014 £m 52 weeks ended 31 Dec 2013 £m Change £m

Pre-exceptional EBITDA 438.0 390.3 47.7 Pension contribution (9.1) (8.1) (1.0) Exceptional cash (34.6) (16.0) (18.6) Working capital 47.1 (12.5) 59.6 Tax (34.5) (55.9) 21.4 Interest (43.6) (41.3) (2.3) Other 4.9 11.1 (6.2) Cash flow from operating activities 368.2 267.6 100.6

Strong cash inflows

• Cessation of non-controlling interest broadly offsets cash dividend increase,

to £104m in total

• Capex shortfall versus expectations (£75m versus £80-90m)

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Capex

52 weeks ended 30 Dec 2014 £m 52 weeks ended 31 Dec 2013 £m

Retail development1 25.2 38.8 Online 35.6 31.9 Australia 5.8 2.8 US 2.2 2.6 Other (including IT) 5.8 8.5 Total cash capital expenditure 74.6 84.6

• Estate fell by a net 70 shops to 2,362 (52 openings, 14 closures,

eight re-sites and 108 portfolio closures)

• 2015 cash capex expected to be £80-90m
• Exceptional provision of £12.4m relating to portfolio closure at year-end
• 1. Gross of proceeds on disposal

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Balance sheet supportive of strategic agenda

• Debt levels falling in 2014

– £180m debt pay down – £15m increase in cash in hand – Net debt of £602.8m on bank covenant basis at 30 December 2014 – Net debt/EBITDA at 1.4x against 3.5x maximum covenant (2013: 2.0x)

• Corporate financing activity through the year

– Refinancing of existing revolving credit facility – New £540m five-year facility now in place

• As at 30 December 2014, the Group had balanced spread of debt maturities

– Circa 90% of gross debt fixed, rather than floating – No debt maturity in 2015

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Other finance matters

• Effective pre-exceptional income statement tax rate of 19.9%

– Prior year rate, at 11.5%, benefited from deferred tax credit – Effective full-year income statement rate expected to be 19% in 2015, expected cash tax rate to be 20% in 2015

• Formal three-year actuarial pension valuation process completed

– c£9.4m annual deficit repair payment to May 2019 – Accounting surplus, driven by reduced liability valuation and strong investment returns

• Dividend:

2014 2013 % Change Interim 4.0p 3.7p +8.1% Final 8.2p 7.9p +3.8% Full 12.2p 11.6p +5.2%

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James Henderson

Performance and strategy update

AP McCoy winning the Connolly's Red Mills Horsecare Cubes Novices' Chase on Malt Master at Huntingdon, January 2013

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2014 achievements in a record year

• Another resilient Retail performance
• Continued strong growth in Online
• William Hill US operating profit up 98%1,2
• William Hill Australia operating profit1 doubles

during period of substantial change

• Good progress on responsible gambling measures

100 200 300 400 500 600 2013 2014 Desktop Mobile 70% 30% 57% 43%

Mobile as % of Online net revenue

+48%

growth in mobile Sportsbook net revenue

+117%

growth in mobile gaming net revenue

1. Operating profit/loss is defined as pre-exceptional profit/loss before interest and tax, and the amortisation

• f specific identified intangible assets recognised on acquisitions

2. On a statutory basis £m

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Assessing the ‘black swan’ effect

While football margins are stable… …and accumulators are now a higher % of mobile1

46% 39% 38% 54% 61% 62% 2012/13 2013/14 2014/15 Singles Accas 0% 5% 10% 15% 20% 25% 30% 2011/12 2012/13 2013/14 2014/15 to date Singles Accumulators Pre-match average 1. By amounts wagered on football during the UK domestic football season 10% 11% 12% 13% 14% 2012 2013 2014 Online pre-match betting gross win margin by calendar year Online pre-match betting gross win margin by football season

…margins are affected by accas…

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Substantial progress on responsible gambling

April 2015 Launch of the £50 journey January 2015 ‘Set Your Limits’ is made mandatory Q4 2014 ASA, BCAP, CAP advertising reviews concluded, voluntary restrictions agreed Launched October 2014 Implemented March 2014 Research published December 2014 GambleAware Week January 2015

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Regulatory update

• £50 journey to be implemented 6 April 2015
• Point of Consumption Tax implemented

December 2014

• Consultations on the Horserace Betting Levy,

contributions from offshore operators and possible replacement with a betting right

• 4th EU Money Laundering Directive
• Responses awaited on planning and

advertising

+29%

Net revenue

+7%

New accounts

+17%

Unique actives

+10%

Revenue per active

+4%

Cost per acquisition

Online UK performance in H2 2014

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• Video walls in 16% of shops
• Digital window display trial

Further technology enhancements

Retail remains resilient

Continued product evolution Strong cost focus

• 5% CAGR in football turnover1
• 50% increase in SSBT football

markets with Online feed

• Eclipse in 70% of estate2
• B2 gross win +3%, B3 +11%3
• Extended single manning

successfully implemented

• Like-for-like rent flat in 2014
• Rolling onto CPI/RPI increases

for content costs 2015-2017

• Closure portfolio benefits cost

progression

59% 52% 14% 17% 17% 15% 6% 7% 4% 9% 2010 2014 Horse racing Football Greyhounds Virtual Other 25% 20% 12% 11% 10% 8% 3% 4% 4% 6% 46% 51% 2010 2014 Horse racing Football Greyhounds Virtual Other Gaming

OTC turnover Retail gross win

783.1 789.7 837.9 907.0 911.4 204.5 196.8 211.5 196.3 193.2 2010 2011 2012 2013 2014 Net revenue Operating profit

Retail five-year financial performance (£m)

1. 2010 to 2014 2. As at 2014 year-end 3. Year on year

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Priority Access card Darts app Vegas app Product expansion: horse racing Product expansion:

• ther

Cash In My Bet Vegas Mayfair games AccaInsurance Live Casino and scratchcards

Online leadership through innovation

• Italy: Sportsbook and Casino iOS
• Spain: Sportsbook and Casino
• Darts
• Vegas iPad
• Live Casino iPhone
• Sportsbook, Casino, Vegas refreshes

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Online leadership through innovation

Priority Access card Darts app Vegas app Product expansion: horse racing Product expansion:

• ther

Cash In My Bet Vegas Mayfair games AccaInsurance Live Casino and scratchcards

• Launching shortly
• By invitation only
• Priority access to the funds in your Online account

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Online leadership through innovation

Priority Access card Darts app Vegas app Product expansion: horse racing Product expansion:

• ther

Cash In My Bet Vegas Mayfair games AccaInsurance Live Casino and scratchcards

• Extensive ‘Daily Meeting Markets’ range

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Online leadership through innovation

Priority Access card Darts app Vegas app Product expansion: horse racing Product expansion:

• ther

Cash In My Bet Vegas Mayfair games AccaInsurance Live Casino and scratchcards

62,606

Football events covered, +6%

39,392

Tennis events covered, +19%

17,015

Basketball events covered, +17%

138,419

Events covered in total, +11%

39% 39% 41% 23% 36% 28% Football Tennis Basketball Pre-match In-play Total

Further strong turnover growth in key products

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Online leadership through innovation

Priority Access card Darts app Vegas app Product expansion: horse racing Product expansion:

• ther

Cash In My Bet Vegas Mayfair games AccaInsurance Live Casino and scratchcards

£40m

Cashed in on football in 2014/15 season so far

1.2 million

AccaInsurance free bets in 2014/15 season so far Extending Cash In My Bet

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Online leadership through innovation

Priority Access card Darts app Vegas app Product expansion: horse racing Product expansion:

• ther

Cash In My Bet Vegas Mayfair games AccaInsurance Live Casino and scratchcards

+68%

growth in net revenue from proprietary Vegas platform

+50%

growth in net revenue from Live Casino

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Strategic priorities: omni-channel

Maximising multi-channel share of wallet

54%

• f Online’s regular

customers regularly bet in LBOs

Customer-focused, technology-led experience ‘One William Hill’ product and content

Tip Advisor in Retail Retail TV to Online US racing to Online Online football content to SSBTs Gantry alignment

34%

• f Retail’s regular

customers regularly bet online

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Strategic priorities: international

William Hill brand launch Live Casino launch in Spain

US turnover ($m)1 US operating profit1,2 ($m) Australia operating profit (A$m)2,3

Palinsesto Supplementare rollout in Italy

1. 2012 numbers are on a statutory reporting basis from the date of ownership 2. Operating profit/loss is defined as pre-exceptional profit/loss before interest and tax, and the amortisation

• f specific identified intangible assets recognised on acquisitions

3. On a pro forma basis 4. Source: AAMS 5. Source: company estimates

Italy Sportsbook market share4 Spain Sportsbook market share5

Australia management change Australia product expansion Australia responsive design launch

tomwaterhouse.com integration

US mobile turnover +65% Net revenue: Italy +39% Spain +64%

174 338 370 36 150 247 2012 2013 2014 Retail Mobile

• 0.9

7.9 15.7 2012 2013 2014 17.0 20.4 45.1 2012 2013 2014

Bet365 46% Bwin 20%

William Hill 19%

Sportium 8% Other 7% Bet365 28% Lottomatica 10% Eurobet 9%

William Hill 9%

Bwin 8% Sisal 8% Paddy Power 7% Snai 7% Others, 14%

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Strategic priorities: technology

OpenBet William Hill Playtech

Increased front-end independence: Project Trafalgar Flexible framework: William Hill API, Central Feeds Ring-fenced back-end solution

700

people in IT team globally

£98m

IT opex and capex in 20141

PRODUCT TRADING VEGAS COMMUNITY

DATA WAREHOUSE BUSINESS INTELLIGENCE WILLIAM HILL API (SERVICE LAYER) TRADING HUB SECURITY MONITORING TRAFALGAR FRONT END FRAMEWORK

CASINO, POKER, BINGO

EXTERNAL GATEWAY

RETAIL DISPLAY GAMING SPORTSBOOK UI MOBILE BETTING UI

CORE SYSTEMS FRONT END ACCOUNT PAYMENT BET CAPTURE SETTLEMENT WALLET

1. Excludes depreciation and amortisation

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Summary

• Record 2014 performance
• Continued strong Online growth
• Underpinned by cash-generative Retail
• Good operating profit progress from US and Australia
• Clear strategy for continued digital and international diversification

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1/5

Hung Parliament

4/1

Conservative-Liberal Democrat coalition

9/2

Coalition involving SNP

9/2

Conservative minority government

11/2

Conservative majority

11/2

Labour-Liberal Democrat coalition

7/1

Coalition involving UKIP

9/1

Labour majority

20/1

Coalition involving Greens

33/1

Conservative-Labour coalition

50/1

UKIP majority

500/1

Liberal Democrat majority

5/1

Labour minority government

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APPENDICES

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Performance by division

1. Group, Retail and gaming machine net revenue growth is flattered by the transition from VAT and Amusement Machine Licence Duty to Machine Games Duty on 1 February 2013. 2. Operating profit is defined as pre-exceptional profit before interest and tax, before the amortisation of specific intangible assets recognised on acquisitions.

Net revenue1 Operating profit2

52 weeks ended 30 Dec 2014 £m 52 weeks ended 31 Dec 2013 £m % Change 52 weeks ended 30 Dec 2014 £m 52 weeks ended 31 Dec 2013 £m % Change

Retail 911.4 907.0 +0% 193.2 196.3

• 2%

Online 527.4 446.3 +18% 177.7 147.8 +20% Telephone 11.8 16.5

• 28%

(0.8) (0.0) n/a William Hill Australia 121.9 86.7 +41% 24.7 12.0 +106% William Hill US 29.7 22.7 +31% 9.7 4.9 +98% Other 7.1 7.3

• 3%

(0.1) 0.2

• 150%

Corporate

• (32.2)

(26.2) +23% Total 1,609.3 1,486.5 +8% 372.2 335.0 +11%

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Net operating expenses by division1

52 weeks ended 30 Dec 2014 £m 52 weeks ended 31 Dec 2013 £m % Change

Retail (508.3) (507.4) +0% Online (298.7) (258.3) +16% Telephone (12.5) (16.5)

• 24%

William Hill Australia (67.1) (54.5) +23% William Hill US (17.5) (15.8) +11% Other (6.3) (6.2) +2% Corporate (33.2) (29.6) +12% Group net operating expenses (943.6) (888.3) +6%

1. Numbers are presented on a pre-exceptional basis, excluding the amortisation of the specific intangible assets arising on acquisitions and net of other income.

41

52 weeks ended 30 Dec 2014 £m 52 weeks ended 31 Dec 2013 £m % Change

Amounts wagered 212.2 252.0

• 16%

Gross win 12.6 17.4

• 28%

Gross win margin 6.0% 6.9%

• 0.9 ppts

Net revenue 11.8 16.5

• 28%

Cost of sales (0.1) (0.0)

• Gross profit

11.7 16.5

• 29%

Staff costs (1.0) (1.7)

• 41%

Marketing costs (2.3) (2.4)

• 4%

Other costs incl. recharges (9.2) (12.4)

• 26%

Operating costs (12.5) (16.5)

• 24%

Operating (loss)/profit1 (0.8) 0.0

• Telephone

1. Operating profit is defined as pre-exceptional profit before interest and tax, before the amortisation of specific intangible assets recognised on acquisitions.

42

Net finance costs

52 weeks ended 30 Dec 2014 £m 52 weeks ended 31 Dec 2013 £m

Interest receivable (1.0) (1.1) Bank loan interest 6.5 10.6 Bond interest 37.2 30.4 Amortisation of finance fees 2.6 3.7 Net interest on pension scheme net liability 0.6 0.7 Total pre-exceptional net finance costs 45.9 44.3

43

Net debt for covenant purposes

As at 30 Dec 2014 £m As at 31 Dec 2013 £m

Bank loans 50.0 230.0 Corporate bonds 675.0 675.0 Cash (222.1) (206.7) Net debt 502.9 698.3 Obligations under bank guarantees 3.2 3.0 Restricted cash – client balances 89.7 85.8 Other restricted cash 7.0 8.9 Net debt for covenant purposes 602.8 796.0

• Net debt: EBITDA of 1.4x vs maximum covenant of 3.5x (31 Dec 2013: 2.0x)
• EBITDA: Net cash interest of 10.4x vs minimum covenant of 3.0x
• BB+/Ba1 stable outlook credit ratings from S&P/Moody’s

44

Australia performance in local currency (pro forma)

1. Operating profit is defined as pre-exceptional profit before interest and tax, before the amortisation of specific intangible assets recognised on acquisitions.

52 weeks ended 30 Dec 2014 A$m 52 weeks ended 31 Dec 2013 A$m % Change

Amounts wagered 2,542.9 2,530.3 +0% Gross win 236.7 211.0 +12% Win margin 9.3% 8.3% +1.0 ppts Net revenue 223.0 200.5 +11% Cost of sales (55.2) (46.5) +19% Gross profit 167.8 154.0 +9% Operating costs (122.7) (133.6)

• 8%

Operating profit1 45.1 20.4 +121% Unique active players (’000) 324.0 282.1 +15% Revenue per unique active (A$) 688 711

• 3%

New accounts (’000) 142.1 136.8 +4% Average cost per acquisition (A$) 351.9 467.8

• 25%

45

US performance in local currency

1. Operating profit is defined as pre-exceptional profit before interest and tax, before the amortisation of specific intangible assets recognised on acquisitions.

52 weeks ended 30 Dec 2014 $m 52 weeks ended 31 Dec 2013 $m % Change

Amounts wagered 617.3 487.6 +27% Gross win 48.6 35.8 +36% Win margin 7.9% 7.3% +0.6 ppts Net revenue 48.6 35.8 +36% Cost of sales (4.1) (3.1) +32% Gross profit 44.5 32.7 +36% Operating costs (28.8) (24.8) +16% Operating profit1 15.7 7.9 +99%