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THE HOME OF BETTING
William Hill corporate presentation April 2015
THE HOME OF BETTING William Hill corporate presentation April 2015 - - PDF document
THE HOME OF BETTING William Hill corporate presentation April 2015 1 Disclaimer This presentation has been prepared by William Hill PLC (William Hill). This presentation includes statements that are, or may be deemed to be,
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William Hill corporate presentation April 2015
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This presentation has been prepared by William Hill PLC (“William Hill”). This presentation includes statements that are,
"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
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
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.
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276.8 275.7 330.6 335.0 372.2 2010 2011 2012 2013 2014
Record operating profit1, up 11%
digital businesses2
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
2. Online and William Hill Australia
World Cup
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Unaudited 2014
Group net revenue +8%
+18%
+0%
+11%
+31%
Group operating profit1 +11%
wagering for the tournament +211% on 2010
Online
turnover and improved gaming growth
effective cost control
1. Operating profit/loss is defined as pre-exceptional profit/loss before interest and tax, before the amortisation of specifically identified intangible assets recognised on acquisitions 2. Pro forma local currency comparisons 3. Digital businesses are Online and William Hill Australia
from digital businesses3 (2013: 36%)
from international markets (2013: 15%)
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82% 8% 2% 8% UK Australia US Other 58% 32% 1% 7% 2% Retail Online Telephone William Hill Australia William Hill US 54% 46% Betting Gaming
Revenue by geography Revenue by product type Revenue by business segment
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MULTI-CHANNEL
INNOVATION, TECHNOLOGY AND DATA INTERNATIONAL
Mobile: 4% Desktop: 10% Retail: 59%
7% 7% 5% 8%
1. Kantar Retail Gambling Tracker Q4 2013. 7.4 million people used Retail, Online or Mobile in the past 12 months out of a UK population aged 18+ of 47.8 million people
UK betting population by channel and age1
50% 44% 55% 66% 80% 29% 30% 22% 15% 7% 21% 26% 23% 19% 13% 0% 20% 40% 60% 80% 100% 18-24 25-34 35-44 45-54 55+ Retail Multi-channel Online
7 MULTI-CHANNEL
INNOVATION, TECHNOLOGY AND DATA INTERNATIONAL
37% 41% 40% 50% 53%
2010 2011 2012 2013 2014
Increasing proportion of internal development spend
1. Company data
Investing in internal technology capabilities1
‐20% ‐10% 0% 10% 20% 30% 40% 50% 60% 70% 20 40 60 80 100 120 140
H1/12 H2/12 H1/13 H2/13 H1/14
Total casino Vegas yoy growth Playtech casino yoy growth
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INNOVATION, TECHNOLOGY AND DATA INTERNATIONAL
1. H2GC Global Gambling Data (February 2014); population data (Wikipedia)
Top ten gambling markets by gross win (2013, £bn)1
215 32 142 226 180 449 106 116 212 153 Gross win per capita (£)
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1. Licensed betting offices 2. Gambling Commission Industry Statistics April 2012-March 2013
757.5 783.1 789.7 837.9 907 2009 2010 2011 2012 2013
Delivering growth against challenging economic backdrop
William Hill, 26% Ladbrokes, 25% Coral, 20% Betfred, 16% Other, 14%
Leader in UK retail bookmaking3 Evolving product mix (revenue)
25% 20% 12% 11% 10% 8% 3% 4% 4% 6% 46% 51% 2010 2014 Horse racing Football Greyhounds Virtual Other Gaming
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Strong profit growth Leader in UK online market2 Growing ahead of the market3
203.5 251.5 321.3 406.7 446.3
2009 2010 2011 2012 2013
50% 11%
15% 22% 16% 13% 4% 12% 12%
Sportsbook Casino Poker Bingo Total
WH Online UK 1. Gambling Data , European Regulated Online Markets Data Report, September 2014 2. 2009 to 2013 CAGR, UK data from H2GC
15% 14% 9% 8% 8% 7% 5% 5% 5% 4% 20%
William Hill Bet365 Betfair Paddy Power Sky Bet Gamesys Ladbrokes Gala Coral PokerStars 888 Others
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Italy online sports market share by turnover2
1. European Brand Study, July 2014 2. Agimeg and AAMS 3. DGOJ, company estimates
Spain online sports market share by turnover3
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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1. NSW and Victoria thoroughbred turnover, Australian Racing Board Fact Book
26% 27% 6% 6% 19% 21% 14% 21% 34% 25% 2011 2013
Tabcorp Tatts Sportsbet William Hill Other
The market is consolidating
59% 43% 14% 13% 18% 10%
9% 34% 0% 20% 40% 60% 80% 100% 2006/07 2012/13 TAB On course Telephone Internet
Online is growing as a proportion of overall betting1 Clear strategy for a competitive market
Trading User experience Brand People External strategy
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1. Handle is defined as the total amounts wagered. Data from UNLV Center for Gaming Research March 2013
Nevada sports handle1 growth
45% 84% 55% 16%
GGR Other William Hill
Nevada sports book market share
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Strong cash generation (£m) Diversified sources of debt funding (£m)
540 540 540 540 540 540 375 375 375 375 375 375 375 300 300 300 500 1000
2014 2015 2016 2017 2018 2019 2020
Revolving credit facility 4.25% bond 7.125% bond
17.5 52.3 60.9 71.1 87.1 104.0 35.1 34.6 53.9 65.0 82.8 74.6 17.4 27.0 31.0 38.5 21.6 116.8 107.2 99.4 131.9 95.2 189.4
2009 2010 2011 2012 2013 2014 Dividends Capex1 Non controlling interests Deleverage
1. Capital expenditure net of disposals
Around 2.5x dividend cover Net debt/EBITDA 1.4x vs covenant of 3.5x
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December 2014
contributions from offshore operators and possible replacement with a betting right
advertising
Net revenue
New accounts
Unique actives
Revenue per active
Cost per acquisition
Online UK performance in H2 2014
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– Distinguishing between harmful and non-harmful gaming machine play – Measures to limit harmful play without impacting on those who do not exhibit harmful behaviours
– It is possible to distinguish between harmful and non-harmful gaming machine play – Data are based on an unrepresentative group so policy-markers are cautioned about implementing interventions on the basis of these data – Holistic approach to problem identifying harm is required, understanding behaviour and patterns of play – Further work required to identify harms that can result in more targeted campaigns
– No ‘silver bullet’ on harm minimisation measures – Problem gambling is found at all staking levels and problem gamblers use multiple products – RGT recommends ‘it would be inadvisable to rush to policies on the basis of these foundational studies’
average stake per bet
£100 max. stake £7 average loss per session
Note: all numbers refer to the average of B2 + B3 activity
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Market leading UK multi-channel betting and gaming business Strong free cash flow and balance sheet Further diversification through international expansion Capitalising on fast-growing digital opportunity
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1. ‘Other’ includes William Hill Australia and William Hill US
H1 2014 £m FY 2014 £m FY 2010 £m Change %
Retail 33.5 44.3 48.6
Online 122.3 158.6 51.0 +211% Telephone 3.7 5.3 15.8
Other1 13.0 18.6
172.5 226.8 115.4 +97% Retail 8.0 12.9 18.1
Online 17.7 24.7 10.2 +142% Telephone 0.4 0.6 3.9
Other1 1.7 2.3
27.8 40.5 32.2 +26% Retail 24.0% 29.2% 37.2%
Online 14.5% 15.6% 20.0%
Telephone 9.5% 11.3% 24.5%
Other1 13.1% 12.4%
16.1% 17.8% 27.9%