INTERIM RESULTS Half Year Ended 30 June 2016 4 August 2016 - - PowerPoint PPT Presentation

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INTERIM RESULTS Half Year Ended 30 June 2016 4 August 2016 - - PowerPoint PPT Presentation

INTERIM RESULTS Half Year Ended 30 June 2016 4 August 2016 Disclaimer Certain statements included or incorporated by reference within this presentation may constitute "forward looking statements" in respect of the operations,


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INTERIM RESULTS Half Year Ended 30 June 2016

4 August 2016

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Disclaimer

Certain statements included or incorporated by reference within this presentation may constitute "forward looking statements" in respect

  • f the operations, performance, prospects and/or financial condition of Ladbrokes plc (the “Company”). Generally, words such as

“may”, “could”, “will”, “expect”, “intend”, “estimate”, “anticipate”, “aim”, “outlook”, “believe”, “plan”, “seek”, “continue” or similar expressions identify forward looking statements. Such statements are inherently predictive and speculative and are based on the Company’s current expectations and beliefs concerning future events and are subject to a number of known and unknown risks and uncertainties beyond the Company’s control that could cause actual future financial condition, performance or results to differ materially from any plans, goals and expectations referred to in these forward looking statements. Such statements are also based on numerous assumptions regarding the Company’s present and future strategy and the environment in which it operates, which may not be

  • accurate. The Company undertakes no obligation to update any forward looking statements contained in this presentation or any other

forward looking statements it may make, save in respect of any requirement under applicable law or regulation. Nothing in this presentation should be construed as a profit forecast. Past performance cannot be relied upon as a guide to future performance and persons needing advice should consult an independent financial adviser. No representation or warranty (express or implied) of any nature is given nor is any responsibility or liability of any kind accepted by the Company or any of its directors, officers, employees, advisers, representatives or other agents, with respect to the truthfulness, completeness or accuracy of any information, projection, representation or warranty (expressed or implied), omissions, errors or misstatements in this presentation, or any other written or oral statement provided. Nothing contained in this presentation is intended to constitute an invitation or inducement to engage in investment activity for the purposes of the prohibition on financial promotions in section 21 of the UK Financial Services and Markets Act 2000. In making this presentation available, the Company makes no recommendation to buy, sell or otherwise deal in shares of the Company or in any other securities or investments whatsoever and you should neither rely nor act upon, directly or indirectly, any of the information contained in this presentation in respect of any such investment activity. This presentation may not be reproduced (in whole or in part), distributed or transmitted to any other person without the prior written consent of the Company and is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use would be contrary to local law or regulation . Any recipients of this presentation outside the UK should inform themselves of and observe any applicable legal or regulatory requirements in their jurisdiction, and are treated as having represented that they are able to receive this presentation without contravention of any law or regulation in the jurisdiction in which they reside or conduct business. In particular, the securities referred to in this presentation have not been and will not be registered under the U.S. Securities Act of 1933 and may not be offered, sold or transferred within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act of 1933.

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INTRODUCTION John Kelly Chairman

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Jim Mullen Chief Executive

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UK: GROW RECREATIONAL CUSTOMER BASE UK: DEVELOP MULTI-CHANNEL UK: INCREASE FOOTFALL IN RETAIL AUSTRALIA: GROW MARKET SHARE

Four key pillars to build a better Ladbrokes

Responsible Gambling Health & Safety

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2017 Targets 12 months to June 2016 Actual 2015 Actual 2014 Actual UK Retail Net revenue per shop(1) > FY14 £392k £377k £356k EBIT per shop(2) > FY14 £54k £51k £42k Digital 30% of Group net revenue(3) 22.7% 20.3% 18.6% Ladbrokes.com Actives over 1.3m 1.3m 1.1m 960k Ladbrokes Australia(4) More than 2x FY14 net revenue 2.0x 1.7x n/a

Strategy is delivering improved customer metrics and improved profitability

(1) Excludes revenue from greyhound tracks (2) On a comparable basis and excludes greyhound tracks, associate income and exceptional items (3) Excludes High Rollers (4) Local currency

2017 targets: Encouraging progress

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FINANCIAL OVERVIEW Richard Snow, CFO

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H1 2016 – Good underlying trading performance, strong results – EBIT +34.4%

16H1 15H1 Variance £m £m

Before exceptional items (1) Excluding High Rollers (2) Includes amortisation of acquisition related intangible assets of £2.2m in H116 and £2.7m in H115

  • Net revenue growth(1): +13.1%

(+10.4% ex. Euros)

  • Operating profit:
  • Marketing led strategy and strong

product offer delivering

  • Favourable OTC and sportsbook

results benefitting from the unpredictability of the Premier League and Euros

  • Tax: lower than medium term

guidance

  • Leverage: strong cash generation

and £35m tax receipt reduces net debt leverage to 1.3x

Net revenue

(1)

661.8 585.4 +13.1% Operating profit

(1)(2)

52.3 38.9 +34.4% Finance costs (12.5) (14.2) +12.0% Profit before tax

(1)

39.8 24.7 +61.1% Effective tax rate 12.3% 10.2% High Rollers (0.1) 2.8 n/a Underlying EPS

(1)

3.4p 2.4p +41.7% Interim dividend 1.0p 1.0p

  • Net debt

227.2 414.3 (45.2)%

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£38.9m £52.3m

HY15 EBIT UK Retail Digital European Retail Telephone Corp Costs HY16 EBIT

£6.6m £1.9m £2.7m (£0.3m) £2.5m

Group Operating Profit +34.4%

  • UK Retail: OTC staking stable despite increased margins; BetStation deliver; Machines

ahead of expectations driven by slots strategy

  • Digital: marketing investment driving growth in actives and stakes per active; Gaming

strong - regulatory impact as expected

  • European Retail: Republic of Ireland 4th consecutive quarter of profitability

9 Before exceptional items

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HY15 EBIT OTC Net Revenue Machines Net Revenue GPT/MGD Marketing Other Costs/SIS HY16 EBIT

£14.1m £12.0m £(9.3)m £(1.5)m £(8.7)m £63.5m £56.9m

£7.9m results driven(1)

  • OTC Net revenue: +7.7% (Q2 +7.4%)
  • OTC staking flat: stable despite higher margins
  • BetStation: c.10% of OTC staking in 16H1 vs. c.4% in 15H1 - football and sports growth;

gross win up 172% year on year

  • Gross win margin: 17.4% (+1.4ppts) vs. 5 year average of c.16.5%
  • Machines: 9th consecutive quarter of growth(2) driven by slots strategy
  • Operating costs: 3.8% up on 15H1 (National Living Wage and voluntary single scheduling)
  • Estate optimisation: 6 closures in H1; c.19 scheduled in H2

UK Retail – operating profit ahead of expectations

(1) Calculated by comparing 2016 H1 gross win margin vs. normalised margin of 16.75% (2) On per shop per week yoy basis

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UK Retail – trends supportive of our FY17 targets

(1) 2013 net revenue has been restated for the VAT impact to enable like for like comparison (2) Excludes revenue from greyhounds tracks (3) Calculated using 2015 H2 gross win margin of 16.4%

Net revenue per shop continues to grow in H1

  • Customers responding to value

proposition – are we winning share?

  • BetStation gross win +172%
  • Gaming machines; sustained focus on

lower staking play

  • Regular product launches continue to

deliver growth in machines gross win

  • Slots the key driver (16H1 40% of

machine gross win vs. 15H1 38%)

  • Now target net revenue growth of

c.4-5% for FY16

+1.5% +4.9% +5.9% +12.2% +4.3% +4.6% +3.7% +1.5% +7.9% Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Machine GW yoy growth

Total Net Revenue Per Shop Trends(1)(2)

ABB Code implementation/ Clarity roll-out £50+ B2 regulation implementation

  • Inc. World Cup
  • Inc. Euro 2016

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12-13 Ave. 14 H1 14 H2 15 H1 15 H2 16 H1 16 H1 adj(3)

OTC net revenue per shop (£000) Machine net revenue per shop (£000) 180 176 180 186 191 201 196

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UK Retail – H1 costs trends broadly in line with guidance, H2 increase

16H1 £m 15H1 £m Variance Staff 108.0 102.4 +5.5% Property 54.8 56.8 (3.5)% Content 47.0 45.9 +2.4% Marketing 12.5 11.0 +13.6% Depreciation 20.4 18.7 +9.1% Other 42.7 40.2 +6.2% Operating Costs 285.4 275.0 +3.8%

  • Staff costs – impacted by National Living

Wage and implementation of voluntary single scheduling

  • Property – benefit from shop closures
  • Marketing includes staff incentives

payments for multi-channel (£1.1m)

  • Depreciation increase reflects investment

in shop fabric

  • 2016 cost guidance c.4-5% increase:
  • Higher revenue share due to Machines and BetStation outperformance
  • Staff costs around voluntary single scheduling and higher bonus provisions

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15H1 NGR H1 Sportsbook H1 Gaming Exchanges Australia Other regulated 16H1 NGR

£112.2m £23.8m £11.6m £(0.4)m £10.1m £0.8m £158.1m

£4.2m results driven(1)

Digital Net Revenue +40.9% – strong customer metrics

  • Sportsbook(2): staking +30.4%(3) (Mobile +44.5%); strong H1 margins; Euros H1 £4.7m

NGR

  • Gaming(2): seventh consecutive quarter of yoy growth for both NGR and actives
  • Australia(4): staking +53.7% as we maintain momentum and build market share

Ladbrokes.com

(1) Calculated by comparing 2016 H1 gross win margin vs. normalised margin of 7.25% (2) Ladbrokes.com (3) Adjusted for the impact of significant HVC activity in Q1 2015 (4) Local currency

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15H1 EBIT Marketing Tax /other variable costs Fixed Costs Net revenue 16H1 EBIT

£(4.0)m £(11.2)m £35.0m £(9.6)m £(18.4)m £(11.0)m

  • Investment programme delivering returns in H1
  • Sportsbook: core stakes per active +12.8%, actives +38.4%
  • NGR growth: Sportsbook(1) +48.0%; Gaming +26.8%
  • Marketing: H1 35% of NGR
  • Multi-channel customers delivered c.10% of Sportsbook NGR

Ladbrokes.com and Exchanges EBIT

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Digital – Ladbrokes Australia

  • Increased marketing and promotional

intensity developing market share

  • Actives 116k (+71%) targeting

recreational customers

  • H1 Marketing at 32% of NGR (15H1:

28%)

  • Operating costs: investment in people,

product, technology and brand to support growth strategy

  • Maintain approach in H2

16H1 AUDm 15H1 AUDm Variance Staking 1,002.3 652.0 +54% Gross win 98.3 62.8 +57% Gross win margin 9.8% 9.6% +0.2ppts Net revenue 69.9 49.4 +42% Operating costs (65.9) (44.2) +49% Operating profit 4.0 5.2 (23)%

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European Retail – investment and restructuring = growth

  • Belgium(2): investment in SSBTs and virtual products delivering growth (staking +14%); net

revenue growth (+18%)

  • Ireland: Northern Ireland EBIT down slightly impacted by adverse horse racing results;

Republic of Ireland delivered strong like-for-like staking growth (+9.7%) and 4th consecutive quarter of profitability

  • Spain: regional roll-out helping to drive revenue growth

16H1 15H1 Variance Net revenue Belgium (€m) 41.9 35.6 +18% Ireland (£m) 32.4 33.6 (4)% Spain JV

(1) (€m)

19.3 13.9 +39% EBIT Belgium (€m) 6.1 6.1 n/a Ireland (£m) 4.4 2.5 +76% Spain JV

(1) (€m)

(0.3) (1.1) +73% European Retail (£m - reported) 8.9 6.2 +44%

(1) Being 50% share of Sportium JV gross win and EBIT (2) Local currency

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Cashflow and Exceptional Items

(1) Excludes exceptional items, includes High Rollers (2) Excludes customer balances

  • Capex
  • H1: UK Retail £15.3m; Digital £12.4m; Other £4.1m
  • FY16 guidance: c.£90-95m
  • Tax
  • Receipt of tax refund from HMRC of £35m following steps

taken in 2015 to accelerate the use of historic corporation tax losses

  • Dividend
  • Payment of 2015 final dividend of 2.0 pence per share
  • Exceptional Items – H1 £14.5m P&L charge: mainly relates

to Coral merger and integration planning costs. £8.3m incurred in cash in H1. Higher cash exceptionals relating to the merger expected in H2

  • Net Debt
  • Comprises 2 bonds - £225m 7.625%, maturing 2017 and

£100m 5.125% retail bond, maturing 2022

  • Cash(2) at H1 2016 £101m (H1 2015: £21m)

16H1

£m EBITDA(1) 91.8 Net finance expense (14.1) Capex (31.8) Other 25.0 Operating free cash flow 70.9 Tax 34.6 Dividend (20.3) Exceptional items (8.3) Net debt movement 76.9 Opening net debt (304.1) Closing net debt (227.2) Net Debt / EBITDA(1) 1.3x

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Group

  • Continued increased marketing investment in UK Retail, Ladbrokes.com and Australia
  • Depreciation & amortisation c.£82-84m
  • Capex – c.£90-95m – UK estate investment programme continuing
  • Sporting results expected to normalise

UK Retail

  • Estate optimisation: c.25 shop closures in FY16
  • FY16 OTC gross win margin target range c.17% as sporting results are expected to normalise
  • Machines revenue: competitor response, target upgraded to c.4-5% growth
  • Operating costs increase c.4-5%; includes impact of National Living Wage and implementation of

voluntary single scheduling Digital

  • Ladbrokes.com
  • FY16 marketing intensity c.30% of NGR, focus remains on investment over short-term profitability
  • FY16 margin c.7.25% to permit value based offers
  • Australia – target strong double digit revenue growth; continue to invest in marketing

Brexit

  • No economic impact identified to date

Updated Guidance for FY16

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  • Strong returns from sustained investment in marketing and products
  • Strong balance sheet supported by good cash generation
  • Current trading to 2 August:
  • Net revenue +14.5%: H2 has started well following a strong finish to Euro 2016 offset

slightly by a customer friendly Goodwood & Galway festival

  • H2 focus will remain on marketing investment over short term profitability
  • FY expectations increase although margins expected to normalise

Summary

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BUILDING A BETTER LADBROKES Jim Mullen Chief Executive

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UK RETAIL Making it Happen

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Staking growth ahead of competitors

UK Retail: Recreational customers are responding

Plan A focuses:

  • Brand: increased presence; relevant to customers; call to action
  • Football: competitive promotion and pricing
  • BetStation: compelling product offer
  • Multi-channel: reward Multi-channel behaviour
  • Machines: lower stakes strategy along with further responsible gambling measures

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  • Continued marketing investment
  • FA official partner and official bookmaker
  • SPFL sponsorship
  • Tabloid presence
  • Product diversity
  • BetStation
  • Coupon range
  • Consistent value offer

Favourable results welcome but underlying metrics are encouraging

Football: Delivering growth

+15% yoy 16H1 football as a % of staking Staking lfl, 15/16 football season(1) +4pps yoy +38% yoy Gross win lfl, 15/16 football season(1)

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(1) 2015/2016 football season from August 2015 to May 2016

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  • Positive staking trends continued
  • 10% of OTC staking (vs. 15H1 4%)
  • 75%+ on football
  • Record staking: £5m+ staking week during Euro’16
  • Average stake size: 16H1 +9.7% yoy
  • Opportunities for growth
  • More sports/events
  • More in-play
  • More higher team multiples

BetStation now a core part of retail offer

BetStation: Market leading position

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BetStation Staking per shop per week £

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  • Over 100,000 actives in less than a year since August 2015 full roll out
  • 16H1 70k+ new Multi-channel actives
  • Euro’16 period alone generated over 13k new actives
  • Geographic expansion into Republic of Ireland
  • Shops and shop colleagues the most effective cross sell / affiliate

network

  • c.9,400 shop colleagues rewarded so far
  • Attractive Multi-channel customer profile
  • Higher retention than pure .com players
  • More valuable than pure .com players

On-going momentum

Multi-channel: 10 months, 100,000+ customers and growing

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Product evolution essential, more to play for

Multi-channel: Continued enhancement opportunities

Key features released in 16H1 on our loyalty app “The Grid” Extended the Grid app functionality to the Republic of Ireland Extended bet tracking to Horse, Greyhound and Lottos Released login via touch ID Released

  • “Top Bets Widget”
  • “Quick Bet Wizard”

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  • Focus on lower stakes/slots
  • Over 90% of Machine GW from stakes at or below £50
  • Slots GW +11% yoy
  • Slots currently c.40% of GW
  • Successful implementation of
  • Time limit down from 30 minutes to 20 minutes
  • Stake limit down from £250 level to £150
  • Algorithms independently reviewed

Slots / B3 growth gives more sustainable income

Machines: Content focused strategy

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(1) Being 16H1 statistics

  • Differentiated High Street offer
  • New menu recently rolled out
  • New games keep coming: 16H1 released 20 games,
  • f which 15 are slots games
  • Myth busters(1)
  • Average stake per spin £4.56
  • Average spend per session £6.36
  • Average session time 6 minutes 28 seconds
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LADBROKES.COM Making it Happen

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Customer driven not technology driven

Euro Hub Edit My Acca Multi-channel Games

Ladbrokes.com record half year

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  • Focus on key growth areas
  • Benefitting from marketing investment
  • Marketing spend +78%
  • More content
  • 2x more events streamed than 15H1

Recreational customers driving growth

Sportsbook: 10th consecutive quarter of staking growth

Mobile +45% yoy BIP(1) +44% yoy +51% yoy Football(1) Staking(1) +30% yoy +38% yoy Actives

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(1) Adjusted for the impact of losses following significant HVC activity in Q1 2015

Mobile 70% Desktop 30%

15H1 Sportsbook Stakes(1)

Mobile 78% Desktop

22% 16H1 Sportsbook Stakes

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  • Focus on products in 16H1
  • 124 games released
  • 15 Multi-channel games released
  • New Mobile games: four per week on average
  • Benefitting from marketing investment
  • Mobile growth
  • 69% of 16H1 Gaming NGR (15H1 51%)

Improved offer continues to drive customer response

Gaming: 7th consecutive quarter of revenue growth

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  • 7%
  • 2%

+23% +35% +13% +29% +42% +44% +51%

  • 19%

+9% +13% +19% +12% +10% +27% +26% 14Q2 14Q3 14Q4 15Q1 15Q2 15Q3 15Q4 16Q1 16Q2

Gaming Actives yoy Gaming NGR yoy

Playtech migration completed

Flat

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LADBROKES AUSTRALIA Making it Happen

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  • Differentiated product
  • Richer content e.g. InfoHub
  • Market is money back, we are Odds Boost
  • Higher marketing intensity
  • Localising the brand: from a British brand to a more local brand
  • Higher marketing presence sustaining 3rd brand awareness ranking
  • Smarter and more effective CRM

(1) Local currency

Recreational growth

Ladbrokes Australia: goes from strength to strength

+54% yoy Actives Staking(1) +71% yoy +42% yoy NGR(1)

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EUROPEAN OPERATIONS UPDATE

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Belgium

  • Staking +18% yoy(1)
  • Multi-channel programme launched
  • Virtual regulation changes on hold

Republic of Ireland

  • Staking +10% yoy lfl(1)
  • Benefits of Examinership continue
  • More competitive and multi-channel released with good start

Spain

  • Continued top line growth: staking +53%(1)
  • Digital growing well: actives +25%
  • Outlets increased to 1,672, up 29%; launched in three new regions

Balanced portfolio in regulated markets

Continued international progress

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(1) Local currency

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SUMMARY

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UK RETAIL OTC(1) LADBROKES.COM Sportsbook Staking +44% +103% Gross win +109% +348% Number of bets +47% +100% Sportsbook football actives n/a +65%

(1) Like for like for UK Retail

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Last four Saturdays of the 2015/16 EPL vs. 2014/15 EPL

UK RETAIL OTC(1) LADBROKES.COM Sportsbook Football staking +25% +26% Total staking +2% +24% Total number of bets +3% +51% Sportsbook actives n/a +30%

Strategy one year on

Euro 2016 vs. Euro 2012

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Much remains to be done

Good progress and opportunities ahead

  • Results ahead of our expectations
  • Customer metrics are driving growth
  • Ladbrokes is winning recreational customers
  • Cultural change – “pride and belief”
  • Merger moves closer and is a significant opportunity
  • But focus remains on customers and customer driven investments

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Q&A

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APPENDICES

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CMA conclusions Aug /Sep 2016 July 2016 Late Sep /early Oct 2016 16Q4 to 17Q1 Divestment / sale process Completion from CMA perspective Significant integration activities

Merger update

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Half year ended 30 June Net revenue Operating profit(1) 2016 £m 2015 £m Variance £m 2016 £m 2015 £m Variance £m UK Retail 436.6 410.5 +26.1 63.5 56.9 +6.6 Digital 158.1 112.2 +45.9 (9.6) (11.5) +1.9 European Retail 64.4 60.0 +4.4 8.9 6.2 +2.7 Telephone Betting 2.7 2.7

  • (0.8)

(0.5) (0.3) Corporate costs

  • (9.7)

(12.2) +2.5 Total 661.8 585.4 +76.4 52.3 38.9 +13.4

Group

Net revenue and operating profit (ex. High Rollers)

(1) Operating profit is before exceptional items

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Half year ended 30 June 2016 2015 Variance

OTC Gross win margin 17.4% 16.0% +1.4pps Like for like OTC amts staked 1.3% (3.6%) +4.9pps Like for like OTC net revenue increase/(decrease) 8.8% (5.0%) +13.8pps Like for like total costs (1) increase 5.3% 1.8% (3.5)pps Like for like shop staff costs increase 6.7% 3.9% (2.8)pps Stake per slip (2) £8.62 £8.43 +2.3% Average number of machines 8,576 8,732 (1.8)% Average weekly gross win per machine £1,083 £1,022 +6.0% Average weekly machine gross win per shop £4,316 £4,070 +6.0%

Like for like takes into account shop openings and closures (1) Excludes MGD, freebets and gross profits tax (2) Slips exclude machines

UK Retail

KPIs

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Half year ended 30 June 2016 £m 2015 £m Variance

OTC gross win 202.8 185.4 +9.4% Machines gross win 241.5 230.7 +4.7% Total gross win 444.3 416.1 +6.8% OTC net revenue 197.6 183.5 +7.7% Machines net revenue 239.0 227.0 +5.3% Total net revenue 436.6 410.5 +6.4% Associate income 1.8 1.6 +12.5% Gross profits tax (29.9) (27.2) (9.9)% Machine Games Duty (59.6) (53.0) (12.5)% Staff costs (108.0) (102.4) (5.5)% Property costs (1) (54.8) (56.8) +3.5% Content costs (2) (47.0) (45.9) (2.4)% Marketing (12.5) (11.0) (13.6)% Other costs (inc. depn) (3) (63.1) (58.9) (7.1)% Operating costs (285.4) (275.0) (3.8)% Operating profit 63.5 56.9 +11.6%

(1) Rent, rates and utilities (2) Pictures, data, levy, Sky TV (3) Depreciation = £20.4m (2015: £18.7m)

UK Retail

P&L (ex. exceptional items)

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Half year ended 30 June 2016 2015 OTC £m Machines £m Total £m OTC £m Machines £m Total £m Variance Gross win 202.8 241.5 444.3 185.4 230.7 416.1 +6.8% Freebets (5.2) (2.5) (7.7) (1.9) (3.7) (5.6) (37.5)% Net revenue 197.6 239.0 436.6 183.5 227.0 410.5 +6.4%

UK Retail

Gross win adjustments

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Half year ended 30 June 2016 £m % of net revenue 2015 £m % of net revenue Variance Net revenue 119.6 84.6 +41.4% Betting tax / Irish VAT (1.1) (0.4) (175)% POC tax (18.7) (12.6) (48.4)% Levy and licenses (0.6) 0.5 (0.4) 0.5 (50.0)% Staff costs (16.7) 14.0 (15.6) 18.4 (7.1)% Software and geographical partners (1) (13.3) 11.1 (9.7) 11.5 (37.1)% Marketing (including affiliates) (42.4) 35.5 (24.0) 28.4 (76.7)% Banking and chargebacks (4.2) 3.5 (3.2) 3.8 (31.3)% Other costs (including depreciation and amortn) (2) (32.2) 26.9 (29.7) 35.0 (8.4)% Operating costs (2) (109.4) 91.5 (82.6) 97.6 (32.4)% Operating loss (9.6) (11.0) +12.7% EBITDA 4.6 3.4 +35.3%

(1) Payments to third party software and platform providers and geographical partners (2) Includes depreciation of £12.5m (£12.5m in 2015) and amortisation of acquired intangibles of £1.7m (2015:£1.9m)

Digital – Ladbrokes.com & Exchanges

P&L (ex. exceptional items)

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Digital - Australia

P&L (ex. exceptional items)

(1) Includes depreciation and amortisation of £0.5m (£1.1m in 2015)

Half year ended 30 June 2016 % of net revenue 2015 % of net revenue Variance £m £m Gross win 49.9 32.4 +54.0% Freebets (10.8) (4.4) (145.5)% GST (3.6) (2.6) (38.5)% Net revenue 35.5 25.4 +39.8% Levy and licenses (8.4) 23.7 (5.2) 20.5 (61.5)% Staff costs (5.8) 16.3 (4.2) 16.5 (38.1)% Marketing (including affiliates) (11.4) 32.1 (7.0) 27.6 (62.9)% Other costs (including depreciation)

(1)

(7.8) 22.0 (6.3) 24.8 (23.8)% Operating costs

(1)

(33.4) 94.1 (22.7) 89.4 (47.1)% Operating profit 2.1 2.7 (22.2)% EBITDA 2.6 3.8 (31.6)%

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(1) A player who contributed to rake and/or placed a wager during the half year (2) A new player who has registered and deposited funds during the half year (3) Revenue per unique active player for the half year

Half year ended 30 June 2016 2015 Variance Total Digital Unique active players (1) (000s) 1,034 739 +39.9% Real money sign-ups (2) (000s) 628 388 +61.9% Sportsbook Gross win margin 7.7% 5.2% +2.5pp Unique active players (1) (000s) 848 610 +39.0% Average monthly active player days (000s) 1,659 1,205 +37.7% Yield per unique active player (£) (3) 69 56 +23.2% Casino Unique active players (1) (000s) 262 166 +57.8% Average monthly active player days (000s) 234 157 +49.0% Yield per unique active player (£) (3) 115 128 (10.2)% Poker Unique active players (1) (000s) 17 16 +6.3% Average monthly active player days (000s) 32 42 (23.8)% Yield per unique active player (£) (3) 98 99 (1.0)% Games Unique active players (1) (000s) 207 151 +37.1% Average monthly active player days (000s) 245 197 +24.4% Yield per unique active player (£) (3) 81 96 (15.6)% Bingo Unique active players (1) (000s) 57 44 +29.5% Average monthly active player days (000s) 96 95 +1.1% Yield per unique active player (£) (3) 111 139 (20.1)%

Digital

KPIs - Ladbrokes.com

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