2015 final results 52 weeks ended 29 December 2015 | 26 February 2016 William Hill, the official betting partner of the Australian Open, is the first bookmaker to sponsor a Grand Slam tennis tournament. 1 The image shows Andy Murray in the final against the tournament’s ultimate winner, Novak Djokovic.
Disclaimer This presentation has been prepared by William Hill PLC (“William Hill”). This presentation includes statements that are, or may be deemed to be, “forward-looking statements”. These forward-looking statements can be identified by the use of 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 on 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 operations, financial condition, liquidity and dividend policy of the Group and the development of the industry in which it operates 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. 2
Overview • Good progress on strategic priorities – Proprietary SSBT in-shop, preparing for EURO 2016 roll-out – Online Trafalgar mobile front-end is live, platform for rapid innovation – Australian business exited 2015 with encouraging growth after brand launch • Operating profit of £291.4m, +2% excluding c£87m of additional UK gambling duties • Strong cash generation: operating cash flow £300.9m, net debt for covenant purposes down to £488.2m • Dividend payout ratio increased to c50% of adjusted EPS, full-year dividend +2.5% • Up to £200m capital return via share buyback to shareholders 3 Numbers are presented on a pre-exceptional basis. Definitions are provided in the glossary at the back of the presentation.
Philip Bowcock, Chief Financial Officer 2015 financial results 4 Gary Anderson retained his title at the William Hill World Darts Championship at Alexandra Palace on 4 January 2016.
Group income statement 52 weeks ended 52 weeks ended % change 29 Dec 2015 30 Dec 2014 £m £m Net revenue 1,590.9 1,609.3 -1% • Operating profit +2% excluding £87m for Operating profit 291.4 372.2 -22% additional UK Point of Consumption Tax and the increased Machine Games Duty rate Amortisation (8.1) (9.0) -10% Net finance costs (39.6) (45.9) -14% Profit before tax 243.7 317.3 -23% Tax (32.1) (63.1) -49% • Effective tax rate of 13.2% Profit after tax pre-exceptionals 211.6 254.2 -17% • Principal item is £60.6m cost related to accelerated brand amortisation for William Pre-tax exceptional items -29% (59.0) (83.4) Hill Australia Post-tax exceptional items -55% (21.7) (47.9) • Includes £19.4m credit related to release of historical provisions Basic, adjusted EPS (p) 24.7 29.9 -17% Dividend per share (p) 12.5 12.2 2.5% Net debt for covenant purposes 488.2 602.8 -19% • Net debt to EBITDA of 1.3x (2014: 1.4x) 5 Throughout this presentation, numbers are presented on a pre-exceptional basis unless otherwise stated. Definitions are provided in the glossary at the back of the presentation.
Online operating profit impacted by POCT 52 weeks 52 weeks % ended ended change 29 Dec 2015 30 Dec 2014 2015 2014 % UK % £m £m Sportsbook amounts wagered 3,963.4 3,758.2 +5% Unique actives (’000) 2,692.2 2,467.9 +9% +11% - Sportsbook gross win margin 7.8% 7.6% +0.2 ppts Revenue / unique active (£) 204.6 213.7 -4% -0% Sportsbook net revenue 263.9 253.3 +4% New accounts (’000) 1,235.8 1,225.2 +1% +5% Gaming net revenue 286.8 274.1 +5% Ave. cost per acquisition (£) 97.6 107.8 -9% -2% - Vegas product suite 166.9 138.9 +20% - Playtech Casino 86.3 96.6 -11% • Core markets +7%, Other markets -1% - Poker 10.3 14.9 -31% - Bingo 23.3 23.7 -2% • Core markets +11% but Other markets -27% Net revenue 550.7 527.4 +4% Cost of sales (126.1) (51.0) +147% • Includes £66.4m of additional Point of Consumption Tax Gross profit 424.6 476.4 -11% following its introduction on 1 December 2014 Operating costs (298.1) (298.7) -0% - Employee costs (55.9) (53.0) +5% - Marketing (120.6) (132.1) -9% • UK marketing +3% - Finance charges (21.0) (20.3) +3% - Depreciation and amortisation 1 (34.2) (26.6) +29% - Other costs incl. recharges (66.4) (66.7) -0% Operating profit 126.5 177.7 -29% • Operating profit +9% excluding additional POCT 6 1. Excludes £1.3m of Online amortisation relating to acquired intangibles (2014: £1.3m)
Online core markets continue to grow 2015 £m 2014 £m % change Core markets - net revenue 483.7 436.2 +11% Other markets 2015 net - net revenue Italy 67.0 91.2 -27% revenue High risk 1.5% 5% Spain 4% Medium risk 1.0% UK 5% 2015 £m 2014 £m % change 2014 net 4% revenue Other - Amounts wagered 2,769.0 2,614.6 +6% 12% 74% Lower risk 9.5% 17% UK - Net revenue 435.7 392.2 +11% 79% ITALY 2015 € m 2014 € m % change - Amounts wagered 244.2 161.4 +51% - Net revenue 37.8 29.6 +28% Notes ‘High risk’ revenues are those considered likely to be impacted by negative regulatory change during the coming year. ‘Medium risk’ revenues may be at risk in 2017. ‘Low risk’ revenues SPAIN may also be at risk over the longer term but are considered unlikely to be impacted during the 2015 € m 2014 € m % change coming year. - Amounts wagered 378.9 327.9 +16% - Net revenue 28.4 25.1 +13% 7
Online wagering trends and impact of POCT Online wagering growth rates in 2015 Online operating profit bridge 240 (24.2) 47.5 Italy and Spain (constant currency) 220 40% (66.4) 200 30% 177.7 Other markets (£) 180 £m 160 20% 11.5 (19.6) 140 UK (£) 126.5 10% 120 0% 100 Q1 Q2 Q3 Q4 2014 Core Other POCT Marketing Other cost of 2015 operating markets net markets net sales / operating profit revenue revenue operating profit -10% costs -20% 8
Retail continues to show resilience 52 weeks 52 weeks % ended ended change 29 Dec 2015 30 Dec 2014 £m £m 2015 2014 % change Average no. of LBOs 2,363 2,406 -2% OTC amounts wagered 2,416.5 2,452.2 -1% Average no. of machines 9,299 9,458 -2% OTC gross win 430.9 449.7 -4% Machine density 3.94 3.93 +0% - OTC gross win margin 17.8% 18.3% -0.5 ppts Gross win / machine / week 1 £949 £939 +1% Machine gross win margin 3.46% 3.44% +0.02 ppts Machines gross win 458.7 461.8 -1% Total gross win 889.6 911.5 -2% • Gross win margin -0.5 ppts, no major international football Net revenue 889.5 911.4 -2% tournament and exceptional shop closures in 2014 Cost of sales (222.8) (209.9) +6% • Includes additional £19.1m in Machine Games Duty following the rate increase to 25% on 1 March 2015 Gross profit 666.7 701.5 -5% • Reflects the lower average number of shops following the Operating costs (495.3) (508.3) -3% exceptional closure of 108 in 2014 and lower staff incentives - Employee costs (184.7) (195.2) -5% - Property costs (103.7) (101.4) +2% - Content costs (71.6) (70.2) +2% - Depr. and amortisation (29.4) (29.5) -0% - Other costs incl. recharges (105.9) (112.0) -5% Operating profit 171.4 193.2 -11% • Operating profit -1% excluding increased MGD 9 1. Excludes free bets
Retail continues to be highly cash generative £m 220 214.1 £297.1m 202.7 200 in taxes, levies and content incurred in 2015 184.4 180 £77.2m 171.4 160 increase in taxes, levies and content between 2009 and 2015 140 2009 2010 2011 2012 2013 2014 2015 Reported operating profit Cash generated 1 Notes 1. ‘Cash generated’ is reported operating profit with depreciation and amortisation added back in and capex deducted 10
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