FY15 Results 30 th November 2015 Overview Carl Leaver FY15 Results - - PowerPoint PPT Presentation

FY15 Results 30th November 2015

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Overview Carl Leaver FY15 Results Paul Bowtell FY15 Highlights Carl Leaver Summary Carl Leaver Q&A

Disclaimer

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Forward-Looking Statements This presentation may include forward-looking statements. All statements other than statements of historical facts included in this presentation, including those regarding Gala Coral’s financial position, business and acquisition strategy, plans and objectives of management for future operations are forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Gala Coral, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The words “believe,” “anticipate,” “expect,” “predict,” “intend,” “estimate,” “plan,” “aim,” “assume,” “forecast,” “project,” “will,” “may,” “should,” “risk,” “probable” and similar expressions, which are predictions or indications of future events and future trends, which do not relate to historical matters, identify forward-looking statements. All statements other than statements of historical facts included in this presentation including, without limitation, in relation to the Group’s investment performance, results of operations, financial position, liquidity, prospects, growth potential, strategies and information about the macro-economic, industry and regulatory environment in which the Group operates are forward-looking. Readers of this presentation should not rely on forward-looking statements because, by their nature, such forward-looking statements involve known and unknown risks and uncertainties that could cause the Group’s actual results, performance or achievements and the development of the industry in which it operates to be materially different from those expressed in, or suggested by, the forward-looking statements contained in this presentation. These forward-looking statements are made as of the date of this presentation and are not intended to give any assurance as to future results. Neither the Group nor any of the Group’s Directors or other officers undertake any obligation, except as required by law

• r by any appropriate regulatory authority, to presentation publicly any revisions or updates to these forward-looking statements to

reflect events that occur, circumstances that arise or new information of which they become aware after the date of this presentation.

Overview

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FULL YEAR HIGHLIGHTS

• Total Coral Group EBITDA of £205.3m was £2.7m or 1% ahead of last year despite
• Regulatory / tax headwinds (£45.6m)
• No World Cup (£7.9m)
• Underlying EBITDA growth of 30% after adjusting FY14 for regulatory impacts and World Cup
• Market leading growth in Online: EBITDA of £56.2m was £6.7m or 14% ahead:
• Coral.co.uk net revenue +62%
• Galabingo.com net revenue +26%
• 972k first time depositors (Coral.co.uk 630k)
• Connect signups now over 325k
• UK EGR Awards: Online Operator of the Year and Bingo Operator of the Year
• Italy EGR Awards: Online Operator of the Year and Sports Operator of the Year
• Underlying EBITDA growth in Coral Retail and strong market share growth in Eurobet Retail
• Announced the proposed merger of the Coral Group with Ladbrokes Plc, subject to approval

from the Competition and Markets Authority, and agreed the disposal of Gala Retail

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FY15 Results Paul Bowtell, CFO

• FY15 Group Results
• Cashflow
• Capital Expenditure
• Financing
• Current Trading

FY15 Group Results

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[1] Results include all revenue and expenses for the Coral Group and excludes Gala Retail (FY15: £50.6m and FY14: £32.9m), the Casinos disposed of in FY14 (FY15: £0.0m and FY14: £0.2m), Propco rental income (FY15: £5.8m and FY14: £28.2m) and High Roller activity (FY15: -£7.6m and FY14: £0.0m) [2] Statutory turnover of £1,007.6m includes Coral Retail vending machine income of £2.2m which is excluded from Net Revenue [3] EBITDA and EBIT are stated pre-exceptional items [4] In addition to the incremental £39.9m tax costs included in cost of sales, we have incurred an estimated £5.7m of lost EBITDA as a result of the DCMS £50 staking restrictions (total regulatory impact of £45.6m)

Net Revenue

• Coral Retail in-line
• Eurobet Retail -7%
• Online +36%

Cost of Sales

• Includes £39.9m of incremental

tax costs[3] Operating Costs

• Coral Retail 2% lower
• Eurobet Retail 16% higher
• Online 28% higher

Amortisation

• £12.9m of amortisation is only

chargeable under UK GAAP

Continuing Operations [1] FY15 FY14 Change £m £m % Net revenue [2] 1,005.4 945.3 6% Cost of sales (305.9) (259.9) (18%) Gross profit 699.5 685.4 2% Marketing costs (Online) (56.1) (46.7) (20%) Operating costs (438.1) (436.1) (0%) EBITDA [3] 205.3 202.6 1% Depreciation (46.8) (43.3) (8%) Amortisation: IFRS (8.4) (8.9) 6% Amortisation: UK GAAP (12.9) (12.9) 0% EBIT [3] 137.2 137.5 (0%)

FY15 EBITDA Bridge

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[1] Includes EBITDA from continuing Coral Group operations [2] FY15 Coral Group EBITDA (pre-exceptionals) rebased for the estimated impact of Point of Consumption Tax (-£20.4m), the increase in rate of MGD to 25% and DCMS FOBT high staking restrictions (-£16.5m), calculated as if all changes had been in existence for the corresponding periods in FY14

£202.6m £157.8m £205.3m

19.2 20.3 9.8 2.2 1.6 (36.9) (7.9) (3.5) (2.1)

+30.1%

+34. 5%

[2] [1] [1]

Coral Retail £16.5m Coral.co.uk £10.6m Gala websites £9.2m Coral Telebet £0.6m Coral Retail £4.5m Eurobet Retail £1.9m Coral.co.uk £1.0m Eurobet.it £0.5m

Underlying EBITDA growth of £47.5m or 30% Coral Retail +£19.2m

• Strong Machines performance
• Good cost control

Eurobet Retail -£3.5m

• Stakes growth
• Market share gains
• Poor football results

Online +£28.0m

• Growth in first-time depositors,

actives and spend-per-head

Regulatory Impact

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[1] FY14 rebased reflects the impact of regulation as if all changes had been in existence for the corresponding periods as FY15 actuals [2] FY15 annualised reflects the annual impact of regulation as if it had been in place for the whole of FY15 [3] Analysis excludes c£9.5m annual impact of the implementation of MGD at 20% in February 2013

Regulation Description & Timing FY15 FY14 [1] FY15 [2] Actual Rebased Annualised £m £m £m Coral Retail MGD @ 25% Rate increased effective March 2015 (10.8) (10.5) (18.8) £50 Stake Supervision Effective April 2015 (5.7) (6.0) (12.3) Coral Retail total impact (16.5) (16.5) (31.1) Online Point of Consumption Tax (POC) Effective December 2014 (28.6) (19.8) (34.1) Coral Telebet Point of Consumption Tax (POC) Effective December 2014 (0.5) (0.6) (0.7) Total Group impact (45.6) (36.9) (65.9)

Coral Retail FY15 Profit & Loss

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[1] Net revenue is calculated as gross win less free bets [2] EBITDA and EBIT are stated pre-exceptional items [3] There are no assets in Coral Retail that incur an amortisation charge

OTC Stakes 1% ahead (excl. large staking individual and World Cup) Positive staking trends in H2 Major festivals GW% behind FY14 Machines net revenue +4%

• Machines GWPMPW +3% at

£986

• DCMS impact c5% of gross

win (£5.7m)

• B3 slots account for 31% of

gross win Cost of sales includes £10.8m of incremental MGD cost

FY15 FY14 Change £m £m % OTC stakes 1,724.3 1,761.4 (2%) OTC gross win margin % 17.1% 17.5% (0.4pp) OTC gross win 294.7 309.0 (5%) OTC net revenue 293.4 307.6 (5%) Machines net revenue 371.9 357.9 4% Stadia and other 10.6 10.4 2% Net revenue [1] 675.9 675.9 0% Cost of sales (172.0) (161.2) (7%) Gross profit 503.9 514.7 (2%) Operating costs (362.7) (371.7) 2% EBITDA [2] 141.2 143.0 (1%) Depreciation [3] (27.1) (27.4) 1% EBIT [2] 114.1 115.6 (1%)

Coral Retail Operating Costs

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Employee Annualisation of FY14 payroll efficiencies (see next slide for impact of national living wage) Property Savings from detailed procurement review Shop communications Sky removed from some shops Other shop costs & Central VAT rebates and other targeted cost savings

Memo: FY15 FY14 Shop openings 33 66 Shop closures (16) (24) 17 42

FY15 FY14 Change £m £m % Employee (144.3) (148.5) 2.8% Property (66.8) (68.6) 2.6% Shop communications (49.1) (50.4) 2.7% Other shop costs (45.4) (48.7) 6.8% Central costs (41.2) (44.3) 7.0% Total LFL Operating Costs (346.8) (360.5) 3.8% Estate Development: FY14 opened shop costs (11.9) (6.1) FY15 opened shop costs (3.2)

• FY14 closed shop costs
• (2.8)

FY15 closed shop costs (0.8) (2.3) Total Operating Costs (362.7) (371.7) 2.4%

National Living Wage

Only cashiers and cleaners are directly impacted by NLW. They comprise 17% of total shop staff, but due to shorter hours, only 5% of salary shop costs 2% ASR and statutory obligation on NLW and NMW Projection if pay gap between Assistant Managers and Cleaners & Cashiers is maintained

ASR = Annual salary review NLW = National living wage NMW = National minimum wage

Shop staff pay grades are well distributed and therefore sufficient headroom exists between grades Estimated incremental costs of c£2.0m p.a. by FY18

Financial impact is negligible in FY16 and only c£2.0m by FY18, (less than 1% of operating costs)

FY15 H2 FY16 H1 FY16 H2 FY17 H1 FY17 H2 FY18 H1 FY18 H2 Shop Manager Deputy Manager Assistant Manager Cleaners & Cashiers NLW NMW FY15 H2 FY16 H1 FY16 H2 FY17 H1 FY17 H2 FY18 H1 FY18 H2 Shop Manager Deputy Manager Assistant Manager Cleaners & Cashiers NLW NMW

With no other adjustments, Cleaners and Cashiers would catch Assistant Managers at the end of FY18

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An increase of 2% per annum and maintaining the pay gap resolves the bumping effect

Eurobet Retail FY15 Profit & Loss

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[1] Net revenue is calculated as gross win less free bets [2] Cost of sales includes payments to franchisees and betting duties [3] EBITDA and EBIT are stated pre-exceptional items [4] FY14 figures restated using FY15 actual exchange rates

Sports stakes +28% ex. World Cup (+39% constant currency[4]) BiP stakes growth +85% (+100% constant currency[4]) Market share 14.8% (FY15 H2) Sports gross win margin of 16.6% was 6.4pp behind driven by adverse football results (£3.8m) Rebalancing of customer spend from Virtual back into sports

• Avg. year end shops +81 to 820

210 shops relocated to more profitable locations

Memo: FY15 FY14 Corners 250 232 Shops 570 507 Avg no of licences 820 739

FY15 FY14 Change £m £m % Sports stakes 285.2 240.4 19% Sports gross win margin % 16.6% 23.0% (6.4pp) Sports net revenue 47.5 55.3 (14%) Virtual and other net revenue 29.8 28.2 6% Net revenue [1] 77.3 83.5 (7%) Cost of sales [2] (52.4) (54.8) 4% Gross profit 24.9 28.7 (13%) Operating costs (11.5) (9.9) (16%) EBITDA [3] 13.4 18.8 (29%) Depreciation (4.5) (4.4) (2%) Amortisation: IFRS (8.4) (8.9) 6% EBIT [3] 0.5 5.5 (91%)

Memo: Constant Currency[4] EBITDA (20%) EBIT (89%)

FY15 Online Profit & Loss

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[1] Net revenue is calculated as gross win less free bets [2] EBITDA and EBIT are stated pre-exceptional items [3] FY14 figures restated using FY15 actual exchange rates

Coral.co.uk:

• Actives +20%,
• FTDs +14%
• Bonus / GGR: 23.1%
• Marketing / NGR: 26.1%

Sports margin +0.3pp to 7.0% Gala websites

• Actives +10%
• FTDs +2%
• Bonus / GGR: 26.0%
• Marketing / NGR: 20.6%

Eurobet.it Adverse football results: £3.1m

• Actives +31%,
• FTDs +51%
• Bonus / GGR: 10.2%
• Marketing / NGR 16.8%

FY15 FY14 Change £m £m % Coral.co.uk net revenue 119.0 73.3 62% Gala websites net revenue 92.0 75.0 23% Eurobet.it net revenue 36.8 34.3 7% Net revenue [1] 247.8 182.6 36% Point of consumption tax (28.5)

• (100%)

Cost of sales (52.4) (43.7) (20%) Gross profit 166.9 138.9 20% Marketing costs (56.1) (46.7) (20%) Operating costs (54.6) (42.7) (28%) EBITDA [2] 56.2 49.5 14% Depreciation (15.2) (11.5) (32%) EBIT [2] 41.0 38.0 8%

Memo: Constant Currency Variance [3] Eurobet.it Net Revenue +17% Online EBITDA +15% Online Net Revenue +38% Online EBIT +9%

Online EBITDA Bridge and KPIs

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[1] FY15 Group EBITDA (pre-exceptionals) rebased for the estimated impact of Point of Consumption Tax (-£19.8m), calculated as if all changes had been in existence for the corresponding periods in FY14

• Online NGR to EBITDA pre-POC incremental conversion of 54% (38% post POC)
• >99% revenues are from primary source markets (i.e. UK for Coral.co.uk and Gala websites, and

Italy for Eurobet.it)

`

£49.5m £28.2m £56.2m (19.8) (1.5) (14.6) (5.0) (0.4) (1.7) 34.9 14.8 +99.3% +110.3%

[1]

+31.4%

Underlying EBITDA growth of £28.0m or 99%

FY15 Cashflow

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Unlevered free cashflow £136.9m

• £21.4m ahead of FY14

Working capital and exceptionals (£9.9m)

• Exceptional project costs
• Onerous lease cash costs
• Underlying working capital benefit from

changes in regulatory regime Capex (£53.2m )

• £9.7m favourable to FY14 following 3

years of significant investment Financing

• FY14 £35.0m repayment of the Senior

Secured Note FY15 FY14 Change £m £m £m EBITDA - Coral Group 205.3 202.6 2.7 Working capital and exceptionals (9.9) (20.4) 10.5 Inflow from Operations 195.4 182.2 13.2 Capex/Acquisitions (53.2) (62.9) 9.7 Taxation (5.3) (3.8) (1.5) Unlevered Free Cashflow 136.9 115.5 21.4 Transaction costs (2.2)

• (2.2)

Interest (102.5) (103.9) 1.4 Exceptional interest

• (7.3)

7.3 Free Cashflow 32.2 4.3 27.9 Loan repayments

• (35.0)

35.0 Continuing Group Cashflow 32.2 (30.7) 62.9 Disposal proceeds

• 21.0

(21.0) Discontinued cashflow 1.7 15.4 (13.6) Opco Group Cashflow 33.9 5.7 28.2 Net Propco cashflow (10.6) 2.7 (13.3) Total Cashflow 23.3 8.4 14.9

FY15 Capex/Acquisition of £53.2m represents £54.2m (slide 15) less £1.0m capital creditors FY14 Capex/Acquisition of £62.9m represents £60.4m (slide 15) plus £2.5m capital creditors

FY15 Capital Expenditure

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Coral Retail

• Estate development £12.7m

(33 new shops in FY15 – 66 in FY14)

• New product development £5.6m

Eurobet Retail

• Estate development £5.3m
• New product development £2.7m

Online

• Product development:

Coral.co.uk £9.2m, Gala websites £4.4m, Eurobet.it £1.0m Corporate

• FY14 software licence renewal

FY15 FY14 Change £m £m £m Coral Retail (29.2) (38.6) 9.4 Eurobet Retail (8.1) (2.4) (5.7) Online (16.9) (13.4) (3.5) Corporate

• (6.0)

6.0 Total Coral Group (54.2) (60.4) 6.2 Memo: Gala Retail (13.1) (12.7) (0.4)

Financing

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• Net debt excluding shareholder loan notes of £1,035.5m consists of:
• Since the year end, consent has been granted by lenders to redeem part of the Senior notes (£100m) and to

use the Gala Retail sale proceeds (£241m) to redeem part of the Senior secured notes. Make whole costs of £16m will be incurred on these transactions

• Ladbrokes Plc signed a £1.35bn facility to provide committed financing for the proposed merged company,

which in part will be used to repay £865m debt from the Gala Coral Group

• Ladbrokes Coral Plc shareholding will extinguish the Gala Coral Group shareholder loan notes (PECs)

FY15 FY14 £m £m Senior secured credit facilities (711.9) (711.9) Senior secured notes (315.0) (315.0) Senior notes (275.0) (275.0) Cash at bank and in hand 247.9 214.0 Gross Cash Net Debt (1,054.0) (1,087.9) Issue costs and discount 18.5 24.5 Net debt pre GCGL loan notes (1,035.5) (1,063.4)

Current Trading

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[1] Current trading is for the 8 weeks ending 22 November 2015 compared to the 8 weeks ending 23 November 2014

Coral Retail

• LFL stakes growth driven by strong football

volumes

• Offset by poor football margins
• Growth in Machines gross win despite £50

stake restriction Eurobet Retail

• Strong sports stakes growth
• Gross win margin 5.6pp behind primarily

due to disappointing football results Online

• Online momentum continues into FY16
• Volume growth across all websites, partly
• ffset by the poor football results in the UK

and Italy

Current Trading [1] FY16 FY15 Change £m £m % Coral Retail LFL OTC stakes 261.8 256.1 2.3% LFL OTC gross win margin % 16.7% 18.7% (2.0pp) LFL OTC gross win 43.7 47.8 (8.6%) LFL Machines gross win 60.0 57.3 4.6% Eurobet Retail Sports stakes 54.5 45.5 19.8% Sports gross win margin % 6.1% 11.7% (5.6pp) Sports gross win 3.4 5.3 (27.3%) Online Coral.co.uk Sports stakes 165.5 105.1 57.6% Sports GW % 6.5% 7.4% (0.9pp) Total net revenue 20.5 16.4 25.5% Gala websites Total net revenue 14.9 12.5 19.6% Eurobet.it Sports stakes 40.2 23.4 71.6% Sports GW % 6.1% 10.0% (3.9pp) Total net revenue 5.0 4.9 2.8%

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FY15 Highlights Carl Leaver, CEO

• Coral Retail
• Eurobet Retail
• Online
• Responsible Gambling

Retail – Coral

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Multi-channel

• Access to online wallet

in-shop

• Over 325k Connect sign-

ups

• Launched retail COMB

New products New shop design

• Over 40 refits / new
• penings – with 40 more

refits planned in FY16

• Upgrades showing

strong returns

• New Numbers concept
• Football Jackpot
• Acca-Stacker
• Scratch cards
• Bet-in-play

UK listed competitors YoY Net Revenue growth vs. Coral Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 vs 2% (2%) 1% 1% 0% 1% 2% 4% 5% 4% 6% vs 3% 2% 1% 4% (1%) 0% 6% 1% (1%) 1% (1%) vs Combined 2% 0% 1% 2% 0% 0% 4% 2% 2% 2% 2% Calendar Year 2014 Calendar Year 2015 Calendar Year 2013

Market outperformance driven by innovation and operational excellence

Retail – Eurobet

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Virtual Growth / Bet-in-Play

10.6% 11.8% 13.7% 14.8% H1 FY14 H2 FY14 H1 FY15 H2 FY15

Market Share

• Retail market share nearly

doubled in 2 years (H2 FY13 7.9%)

Now at 15.7% (October 2015)

Dramatic market share gains through roll-out of new licences & estate optimisation

739 210 739 210 FY14 FY15 820

• Estate optimisation relocating

210 licences to more profitable locations

• Over 90% complete at the end of

FY15

Optimised shops

Average no of Active Licences

• Strong growth in newly

regulated products FY14 FY15 €183.8m €126.9m

Virtual - Stakes

FY14 FY15 BiP - Stakes €76.4m €38.2m

Online: Outperformance

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Sources: Gala Coral Online = Coral.co.uk + Galabingo.com + Galacasino.com + Eurobet.it PP = UK + Ire + Italy, exclude Aus. CY2014 converted at GBP/EUR 1.2507. CY2015 H1 converted at GBP/EUR 1.3643 and revenue added calculated as 26% constant currency growth as quoted. WMH = Gibraltar licence + Italy + Spain, excludes Aus. Ladbrokes = Ladbrokes.com (predominantly UK) + Exchanges + Spain +Belgium + Denmark (now discontinued), excludes Aus. Skybet = estimated growth rate based on YTD numbers at to 19th March 2015. Betfair = Sustainable Revenues (excl.US) and Other (assumed mostly European): CY2014 = Year to 31 Jan 2015, H12015 = 6 months ended 31 July 2015. Excludes Bet365 due to lack of publically available information.

41.6 30.3 18.8 20.4 (4.6) 24.8

For the period 6m to 31/7/15. Gala Coral in the same period: £39.8m (+40.0%) growth.

UK and European Total Net Revenue H1 CY15 Growth (% and £m)

135.8 146.7 279.9 222.7 86.8 123.8

For the period 6m to 31/7/15. Gala Coral in the same period: £139.3m

UK and European Total Net Revenue H1 CY15 (£m)

65.8 27.9 81.1 69.6 9.5 37.0

UK and European Total Net Revenue CY14 Growth (% and £m)

196.5 267.5 527.4 409.5 180.5 210.0

UK and European Total Net Revenue CY14 (£m)

Very strong outperformance in CY14 … … continuing into H1 CY15 - now adding more net revenue than all other listed competitors

* Management estimate

Online: Momentum

5.7% 24.9% 25.8% 12.9% UK and European Total Net Revenue Q3 CY15 Growth (% ) For the period 4.5 months to 15 November 2015 For the period 3 months to 31 October 2015 27.6% (3.0%) (9.0%) CY Q3 net revenue growth

• Coral.co.uk +47%

(sports stakes +42%)

• Gala websites +16%

Momentum continues into CY15 Q3

Not disclosed

Note: £m net revenue added not reliably available Sources: Gala Coral Online = Coral.co.uk + Galabingo.com + Galacasino.com + Eurobet.it. Comparison to PP on a constant currency basis. Ladbrokes = Ladbrokes.com (predominantly UK) + Exchanges + Spain +Belgium + Denmark (now discontinued), excludes Aus. WMH = Gibraltar licence + Italy + Spain, excludes Aus. PP = UK + Ire + Italy, exclude Aus. Constant currency growth as quoted Betfair = Sustainable Revenues (excl.US) and Other (assumed mostly European)

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Online: Strategic Framework

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Key Strategies Key Value Drivers Key Performance Indicators

Acquisition Retention Player Value FTDs CPA Churn NGR/RMP Multi-channel Business Intelligence Product Technology

Online: Key Performance Indicators

267 553 630

FY13 FY14 FY15 First Time Depositors (k) CPA - £43 CPA - £52 CPA - £59

38 73 109

FY13 FY14 FY15 First Time Depositors (k) CPA - €99 CPA - €98 CPA - €135

CPA defined as acquisition marketing costs including affiliate costs divide by first time depositors Churn defined as active in prior period, not active in current period

40% 39% 36%

FY13 FY14 FY15

Churn 39% 41% 32%

FY13 FY14 FY15

Churn 28% 27% 28%

FY13 FY14 FY15

Churn £83 £113 £147

FY13 FY14 FY15

NGR/RMP €184 €281 €249

FY13 FY14 FY15

NGR/RMP

Acquisition FTDs CPA Retention Churn Player Value NGR/RMP

198 194 188

FY13 FY14 FY15 First Time Depositors (k) CPA - £77 CPA - £76 CPA - £55 CPA - £59 CPA - £66 CPA - £44

24 £181 £209 £242

FY13 FY14 FY15

NGR/RMP

Online: Technology

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Content Management Systems

Our technology uses the best of in-house software and 3rd party providers often with ring-fenced development teams

Playtech IMS Single Wallet EPOS FOBTs

In house

Key:

3rd Party

Single wallet enables a seamless customer journey and real time access to player data

Poker Bingo Casino Games Sports

3rd Party with ring- fenced resources

Online: Multichannel

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Low cost acquisition of higher value and more loyal customers 325k sign ups c£20 CPA (staff incentive) Churn rates are 17pp lower than non Connect LTV 3 times higher than non Connect

Acquisition Retention Player Value

Churn defined as active in prior period, not active in current period

70k sign ups in FY15 & FY14 €30 CPA Churn rates are 13pp lower than Direct LTV 2 times higher than Direct

Acquisition Retention Player Value

Online: Product - Coral sportsbook

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• 260k events, 1m+ markets, 41 sports
• Bet-in-play offered across 122k events
• 53k streamed events (no 2 behind Bet365)

Touch ID login Partial COMB In-page streaming & visualisation Race simulation

Examples of recent product developments

A competitive offering that benchmarks well against peers

Online: Product - Gaming

Exclusivity more valuable

• 120 new games launched in FY15 on UK websites
• 7% internally developed
• 12% multi-channel
• Strong pipeline into FY16 with further
• 30 new internal games planned
• 30 new multi-channel games planned (of which 12 internally developed)

Multichannel more valuable

£32.1k £19.6k £14.4k £14.5k first 4 weeks average first 8 weeks average

Exclusive Games vs Non Exclusive Games Gross Win

Exclusive Games Non Exclusive Games

£32.8k £28.1k £21.8k £21.7k first 4 weeks average first 8 weeks average

Multichannel vs Non Multichannel Gross Win

Multichannel Games Non Multichannel games

A leading gaming offering across all brands

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Online: Business Intelligence

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Data analysis drives cycle of continuous performance improvement

e.g. LTV Modelling e.g. Churn Modelling

Churn models are applied to all actives and first time depositors

• 85% accuracy of likelihood to churn

Enables:

• Effective/timely intervention to prevent

churn Prediction of new players 6 and 12 month value after 21 days

• 59% predicted within 50p of the actual

value

• 81% predicted within £5

Enables:

• Optimisation of acquisition spend
• Rapid customer segmentation

Galabingo.com 12 Month Player value Prediction vs Actual

Week Week Week Week Week Week Week

1 10 19 28 37 46 52

25% 27% 29% 31% 33% 35% 37% 39% Week 1 Week 10 Week 19 Week 28 Week 37 Week 46 Week 55 Galabingo.com: Weekly Churn rate

Online: Progression Since Re-launch

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0.0 50.0 100.0 150.0 200.0 Yr 0 Yr 1 Yr 2 Yr 3

Online Net Revenue Growth Since Relaunch

Gala Coral (UK & Italy) William Hill GC - FY12 WH - CY08 GC - FY15 WH - CY11 £m (10.0) 0.0 10.0 20.0 30.0 40.0 50.0 60.0 Yr 0 Yr 1 Yr 2 Yr 3 Gala Coral (UK & Italy) William Hill GC - FY12 WH - CY08 GC - FY15 WH - CY11 £m

Online EBITDA Growth Since Relaunch (adjusting Gala Coral to remove POC tax for comparison)

Includes Playtech’s 29% share of JV 100% owned 100% owned Includes Playtech’s 29% share of JV

Since relaunch Gala Coral Online has added more EBITDA (adjusted for POC) than William Hill Online did in the 3 years post their relaunch

Yr1 uplift driven by acquisition of Playtech affiliate which had contributed £26m net revenue in H1 2008

Significant future potential – between CY11 and CY14, William Hill Online added £206m of net revenue and £88m of EBITDA

Yr1 uplift driven by acquisition of Playtech affiliate which had contributed £8m of EBITDA in H1 2008 plus associated cost synergies

Responsible Gambling

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• Working in partnership with the industry, regulator and other stakeholders driving

forward responsible gambling practices

• Senet Group delivered effective educational campaigns across TV, social media and

shops

• Introduction of supervised stakes above £50 from April 2015 has led to profound

customer behaviour change with approx. 70% reduction in stakes above that level

• Trade associations continued to drive forward best practices – refreshed ABB

“Responsible Gambling Code” in September 2015

• Further industry led initiatives continue most notably around behavioural analytics

and self-exclusion

Summary

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• Strong financial performance in FY15
• Coral Retail outperformance through innovation and operational excellence
• Dramatic market share gains in Italy following roll-out of new licences and estate
• ptimisation
• Continued Online outperformance driven by a clear strategy, including multi-channel,

an improved product offering and sophisticated BI, all underpinned by best-in-class technology

• Momentum continuing into FY16, with very significant further potential
• Step change in industry culture around responsible gambling

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Q&A

Appendices FY15 Q4 Group Results EBITDA - FY and CY Regulatory Impact

34

FY15 Q4 Group Results

35

Net Revenue

• Coral Retail -2%
• Eurobet Retail -21%
• Online +30%

Cost of Sales

• Includes £12.4m of incremental

tax costs[3] Operating Costs

• Coral Retail 5% lower
• Eurobet Retail 11% lower
• Online 9% higher

Amortisation

• £3.0m of amortisation is only

chargeable under UK GAAP

[1] Results include all revenue and expenses for the Coral Group and exclude Gala Retail (Q4 FY15: £12.5m and Q4 FY14: £8.7m) and Propco rental income (Q4 FY15: £0.0m and Q4 FY14: £6.5m) [2] EBITDA and EBIT are stated pre-exceptional items [3] In addition to the incremental £12.4m tax costs included in cost of sales, we have incurred an estimated £3.0m of lost EBITDA as a result of the DCMS £50 staking restrictions (total regulatory impact of £15.4m)

Continuing Operations [1] Q4 FY15 Q4 FY14 Change £m £m % Net revenue 229.6 221.8 4% Cost of sales (70.7) (59.2) (19%) Gross profit 158.9 162.6 (2%) Marketing costs (Online) (12.3) (9.6) (28%) Operating costs (103.4) (110.0) 6% EBITDA [2] 43.2 43.0 0% Depreciation (10.9) (11.9) 8% Amortisation: IFRS (2.1) (3.7) 43% Amortisation: UK GAAP (3.0) (3.0) 0% EBIT [2] 27.2 24.4 11%

FY15 Q4 EBITDA Bridge

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[1] Includes EBITDA from continuing Coral Group operations [2] FY15 Group EBITDA (pre-exceptionals) rebased for the estimated impact of Point of Consumption Tax (-£6.4m), the increase in rate of MGD to 25% and DCMS FOBT high staking restrictions (-£7.2m), calculated as if all changes had been in existence for the corresponding periods in FY14

£43.0m £28.8m £43.2m

5.8 4.4 1.5 0.6 0.5 2.5 (13.6) (0.6) (0.9)

+50.0%

[1] [2] [1]

+34. 5%

[1]

Coral Retail £7.2m Coral.co.uk £3.4m Gala websites £2.7m Coral Telebet £0.3m Coral Retail £0.2m Eurobet Retail £0.5m Coral.co.uk (£0.1m) Eurobet.it £0.0m

Coral Retail

• OTC stakes growth
• Machines net revenue ahead
• Lower operating costs

Eurobet Retail

• Stakes growth
• Estate optimisation

Online

• Net Revenue 30% ahead

including Coral.co.uk 50% ahead Underlying EBITDA growth of £14.4m or 50%

EBITDA - Financial Years and Calendar Years

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 (16 weeks) (12 weeks) (12 weeks) (12 weeks) (16 weeks) (12 weeks) (12 weeks) (12 weeks) £'m £'m £'m £'m £'m £'m £'m £'m 40.1 38.4 34.9 27.8 40.0 38.1 35.5 29.4 2.2 4.7 3.7 2.8 3.6 5.7 5.3 4.2 Online 12.9 11.0 17.1 15.2 10.8 10.6 13.4 14.7 0.5 0.5 0.3 (0.2) (0.5) 0.8 (0.4) (0.4) (0.5) (1.5) (2.2) (2.4) (0.7) (1.2) (1.4) (4.9) 55.2 53.1 53.8 43.2 53.2 54.0 52.4 43.0 Q1 (FY Q2) Q2 (FY Q3) Q3 (FY Q4) Q4 (FY16 Q1) Q1 (FY Q2) Q2 (FY Q3) Q3 (FY Q4) Q4 (FY15 Q1) (12 weeks) (12 weeks) (12 weeks) (16 weeks) (12 weeks) (12 weeks) (12 weeks) (16 weeks) £'m £'m £'m £'m £'m £'m £'m £'m 38.4 34.9 27.8 38.1 35.5 29.4 40.1 4.7 3.7 2.8 5.7 5.3 4.2 2.2 Online 11.0 17.1 15.2 10.6 13.4 14.7 12.9 0.5 0.3 (0.2) 0.8 (0.4) (0.4) 0.5 (1.5) (2.2) (2.4) (1.2) (1.4) (4.9) (0.5) 53.1 53.8 43.2

• 54.0

52.4 43.0 55.2 Corporate Costs Total FY14 Total Calendar Years Coral Retail Eurobet Retail CY15 Financial Years Coral Retail Eurobet Retail Coral Telebet FY15 CY14 Coral Telebet Corporate Costs 37

Regulatory Impact – Financial Years and Calendar Years

[1] Forecast [2] Regulatory impacts are calculated as if all changes had been in existence for the same time periods in FY/CY14 as they were in FY/CY15 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 (16 weeks) (12 weeks) (12 weeks) (12 weeks) (16 weeks) (12 weeks) (12 weeks) (12 weeks) (16 weeks) (12 weeks) (12 weeks) (12 weeks) £'m £'m £'m £'m £'m £'m £'m £'m £'m £'m £'m £'m

• (2.2)

(7.1) (7.2)

• (2.1)

(7.2) (7.2) (3.6) (8.2) (8.7) (8.1)

• (2.1)

(5.5) (6.1) (6.1) (0.0) (0.2) (0.2) (0.1)

• (0.0)

(0.2) (0.1) (0.3) (3.6) (10.6) (16.0) (15.4)

• (2.1)

(7.8) (13.4) (13.6) Q1 (FYQ2) Q2 (FYQ3) Q3 (FYQ4) Q4 (FYQ1)[1] Q1 (FY Q2) Q2 (FY Q3) Q3 (FY Q4) Q4 (FY15 Q1) Q1 (FY Q2) Q2 (FY Q3) Q3 (FY Q4) Q4 (FY15 Q1) (12 weeks) (12 weeks) (12 weeks) (16 weeks) (12 weeks) (12 weeks) (12 weeks) (16 weeks) (12 weeks) (12 weeks) (12 weeks) (16 weeks) £'m £'m £'m £'m £'m £'m £'m £'m £'m £'m £'m £'m (2.2) (7.1) (7.2) (9.5)

• (2.1)

(7.2) (7.2) (9.5) (8.2) (8.7) (8.1) (12.6)

• (3.6)

(5.5) (6.1) (6.1) (5.6) (0.2) (0.2) (0.1) (0.2)

• (0.0)

(0.2) (0.1) (0.3) (0.2) (10.6) (16.0) (15.4) (22.3)

• (3.6)

(7.8) (13.4) (13.6) (15.3) Total CY14 Actuals CY14 Rebased[2] Calendar Years CY15 Actuals Coral Retail: POC Total MGD / DCMS MGD / DCMS Telebet: Online: POC Online: POC Telebet: POC FY14 Rebased[2] FY14 Actuals FY15 Actuals Financial Years Coral Retail:

38