the home of betting - william hill...

15
William Hill, the official betting partner of the Australian Open, is the first bookmaker to sponsor a Grand Slam tennis tournament. The image shows Andy Murray in the final against the tournament’s ultimate winner, Novak Djokovic. THE HOME OF BETTING William Hill PLC corporate presentation April 2016

Upload: lekhanh

Post on 23-Apr-2018

223 views

Category:

Documents


4 download

TRANSCRIPT

Page 1: THE HOME OF BETTING - William Hill Plcfiles.williamhillplc.com/media/4037/wmh-corporate-presentation-apr...THE HOME OF BETTING William Hill PLC corporate presentation ... Bet365 Non-reporting

1William Hill, the official betting partner of the Australian Open, is the first bookmaker to sponsor a Grand Slam tennis tournament. The image shows Andy Murray in the final against the tournament’s ultimate winner, Novak Djokovic.

THE HOME OF BETTINGWilliam Hill PLC corporate presentationApril 2016

Page 2: THE HOME OF BETTING - William Hill Plcfiles.williamhillplc.com/media/4037/wmh-corporate-presentation-apr...THE HOME OF BETTING William Hill PLC corporate presentation ... Bet365 Non-reporting

2

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 useof 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 orcomparable terminology. These forward-looking statements include all matters that are not historical facts. They appearin 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 theGroup 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 dependon 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. TheGroup's actual results of operations, financial condition, liquidity, dividend policy and the development of the industry inwhich it operates may differ materially from the impression created by the forward-looking statements contained in thispresentation and/or the information incorporated by reference into this presentation. In addition, even if the results ofoperations, financial condition, liquidity and dividend policy of the Group and the development of the industry in which itoperates are consistent with the forward-looking statements contained in this presentation and/or the informationincorporated by reference into this presentation, those results or developments may not be indicative of results ordevelopments in subsequent periods.

Other than in accordance with its legal or regulatory obligations (including under the Listing Rules, the Disclosure andTransparency Rules and the Prospectus Rules), William Hill does not undertake any obligation to update or revisepublicly any forward-looking statement, whether as a result of new information, future events or otherwise.

Disclaimer

Page 3: THE HOME OF BETTING - William Hill Plcfiles.williamhillplc.com/media/4037/wmh-corporate-presentation-apr...THE HOME OF BETTING William Hill PLC corporate presentation ... Bet365 Non-reporting

3

2015 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

Numbers are presented on a pre-exceptional basis. Definitions are provided in the glossary at the back of the presentation.

Page 4: THE HOME OF BETTING - William Hill Plcfiles.williamhillplc.com/media/4037/wmh-corporate-presentation-apr...THE HOME OF BETTING William Hill PLC corporate presentation ... Bet365 Non-reporting

4

William Hill at a glance

• One of the world’s leading multi-channel betting and gaming companies• Scale operation with highly cash generative Retail business funding growth investment• c16,000 employees in nine countries• A balanced business: 53% betting and 47% gaming• Successful multi-channel model: 59% land-based and 41% digital• UK-focused with increasing international reach: 85% UK and 15% international

85%

6%

2%3%4%

UK AustraliaUS Italy and SpainOther

56%35%

1% 6%

2%

Retail OnlineTelephone William Hill AustraliaWilliam Hill US

53%47%

Betting Gaming

Revenue by geography Revenue by product typeRevenue by business segment

Note: Pie charts show 2015 full-year position

Page 5: THE HOME OF BETTING - William Hill Plcfiles.williamhillplc.com/media/4037/wmh-corporate-presentation-apr...THE HOME OF BETTING William Hill PLC corporate presentation ... Bet365 Non-reporting

5

• Expansion of total betting population– 6.49 million in 20101

– 8.12 million in Q1 20152

• Structural trends in multi-channel usage– 24% increase in number of Retail’s regular customers using online since

Q3 2014– 70% of spend is by Retail customers with online operators– Omni-channel customers spend, on average, 1.8 times what a single

channel customer spends

OMNI-CHANNEL

Our strategic priorities

INTERNATIONAL

TECHNOLOGY

Sources: 1. TGI 2009 (April 2009 – March 2010), TGI 2010 (January 2010 – December 2010)2. Kantar Market Sizing tracker Q1’14– Q1’ 15 , (16.7% of UK adult population 18+ of 47,800,000)

28%

23%

72%

77%

Q3 15

Q3 14

William Hill Retail + William Hill Online

William Hill Retail’s regular customers

13%

Page 6: THE HOME OF BETTING - William Hill Plcfiles.williamhillplc.com/media/4037/wmh-corporate-presentation-apr...THE HOME OF BETTING William Hill PLC corporate presentation ... Bet365 Non-reporting

6

OMNI-CHANNEL

Our strategic priorities

INTERNATIONAL

TECHNOLOGY

• Leverage existing capabilities in other markets• Focus on five regulated markets• Flexible enough to exploit opportunities• Consider complementary gambling skill sets

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 153Gross win per capita (£)

Page 7: THE HOME OF BETTING - William Hill Plcfiles.williamhillplc.com/media/4037/wmh-corporate-presentation-apr...THE HOME OF BETTING William Hill PLC corporate presentation ... Bet365 Non-reporting

7

OMNI-CHANNEL

Our strategic priorities

INTERNATIONAL

TECHNOLOGY

• Blend of in-house / bespoke platforms and third-party expertise• Strong product differentiation through Trading and gaming

platforms• Rapid innovation by controlling front-end (Trafalgar) • Ten-year agreement with OpenBet focused on new back-end

platform within three years, £80m investment in NYX / OpenBet

William Hill is the only operator to have developed a proprietary SSBT. This gives us a leading product range and increased flexibility without paying a revenue share

Through Project Trafalgar, we have taken control of our ‘front-end’ customer interfaces (desktop, mobile web, iOS and Android apps). This enables daily releases and rapid innovation.

Page 8: THE HOME OF BETTING - William Hill Plcfiles.williamhillplc.com/media/4037/wmh-corporate-presentation-apr...THE HOME OF BETTING William Hill PLC corporate presentation ... Bet365 Non-reporting

8

UK Retail• Largest business segment, representing 56% of revenue• Market leader with 2,371 LBOs1, equivalent to 26% market share2

• 48% betting (OTC) and 52% gaming (machine)• £889.5m net revenue and £171.4m operating profit in 2015• Resilient, cash-generative business

1. Licensed betting offices2. Gambling Commission Industry Statistics April 2010-March 2015

783.1 789.7

837.9

907.0 911.4889.5

2010 2011 2012 2013 2014 2015

Delivering revenue growth against challenging economic backdrop

William Hill, 26%

Ladbrokes, 25%Coral,

21%

Betfred, 16%

Other, 12%

Leader in UK retail bookmaking Evolving product mix (gross win)

25% 20%

12% 11%

10%8%

3%4%

4%5%

46% 52%

2010 2015

Horse racing FootballGreyhounds VirtualOther Gaming

Page 9: THE HOME OF BETTING - William Hill Plcfiles.williamhillplc.com/media/4037/wmh-corporate-presentation-apr...THE HOME OF BETTING William Hill PLC corporate presentation ... Bet365 Non-reporting

9

Online• c1,300 employees across seven countries, 35% of Group revenue• Market leader with 15% market share by revenue in the UK1

• 48% betting (Sportsbook) and 52% gaming (casino, bingo, poker)• £550.7m net revenue and £126.5m operating profit in 2015• Well-positioned under UK Point of Consumption Tax change

251.5321.3

406.7446.3

527.4 550.7

2010 2011 2012 2013 2014 2015

1. Gambling Compliance Industry Statistics, April 2010-March 2015. Note this market share data was published in October 2015, prior to the merger of Paddy Power Betfair in 2016

22%

18%

18%

11%

8%

7%

3%15%

Bet365 BetfairWilliam Hill Paddy PowerSkyBet LadbrokesGala Coral Non-reporting operators

12%

9%

8%

7%

6%4%4%4%

4%2%

4%

35%

William Hill Gala CoralSkyBet 888Paddy Power RankLadbrokes BetfairBwin.Party 32RedBet365 Non-reporting operators

UK gaming market share Net revenue growthUK betting market share

Page 10: THE HOME OF BETTING - William Hill Plcfiles.williamhillplc.com/media/4037/wmh-corporate-presentation-apr...THE HOME OF BETTING William Hill PLC corporate presentation ... Bet365 Non-reporting

10

Italy and Spain

• Mobile already generating 47% of net revenue• Strengthening brand awareness: No. 2 in both Italy and Spain• Strong market share gains • Italy profitable at end 2015, Spain to follow thereafter

Italy online sports market share by turnover2

1. Agimeg and AAMS, July 20152. DGOJ, company estimates

Spain online sports market share by turnover3

Bet36546%

Bwin20%

William Hill19%

Sportium8%

Other7%

Bet365 47%

William Hill 9%

Eurobet8%

Lottomatica6%

Sisal 5%

Snai 5%

Bwin Group5%

Paddy Power 6%

Others 9%

Page 11: THE HOME OF BETTING - William Hill Plcfiles.williamhillplc.com/media/4037/wmh-corporate-presentation-apr...THE HOME OF BETTING William Hill PLC corporate presentation ... Bet365 Non-reporting

11

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

William Hill Australia

1. NSW and Victoria thoroughbred turnover, Australian Racing Board Fact Book

• Attractive growth market with high per capita spend on gambling• Online betting projected to grow at 14% CAGR over next few years• Structural growth drivers in core areas of expertise – fixed odds, sports betting, mobile• Established through acquisition of Sportingbet, Centrebet, tomwaterhouse.com• Rebranding as William Hill• A$198.4m net revenue and A$26.6m operating profit in 2015• Potential for long-term regulatory expansion in gaming and further development in

online in-play

26% 27%6% 6%19% 21%14%

21%

34% 25%

2011 2013

Tabcorp Tatts Sportsbet William Hill Other

The market is consolidating Clear strategy for a competitive market

Trading

User experience

BrandPeople

External strategy

Page 12: THE HOME OF BETTING - William Hill Plcfiles.williamhillplc.com/media/4037/wmh-corporate-presentation-apr...THE HOME OF BETTING William Hill PLC corporate presentation ... Bet365 Non-reporting

12

William Hill US

1. Handle is defined as the total amounts wagered. Data from UNLV Center for Gaming Research March 2013

• Land-based sports books and mobile offering in Nevada, with B2B opportunities• Exclusive risk manager for Delaware state lottery• Full gaming licence, well-positioned to exploit growth opportunities• Strong performance since integration• $50.9m net revenue and $14.0m operating profit in 2015

Nevada sports handle1 growth

46%

82%

54%

18%

No. of books Market handle (turnover)

Other William Hill

Nevada sports book market share

Page 13: THE HOME OF BETTING - William Hill Plcfiles.williamhillplc.com/media/4037/wmh-corporate-presentation-apr...THE HOME OF BETTING William Hill PLC corporate presentation ... Bet365 Non-reporting

13

Strong free cash flow and solid balance sheet

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

0 500 1000

2014

2015

2016

2017

2018

2019

2020

Revolving credit facility 4.25% bond 7.125% bond

17.552.3 60.9 71.1 87.1 104.0 108.4

35.1

34.653.9

65.082.8

74.6 67.5

17.4

27.031.0

38.521.6

116.8

107.299.4

131.9 95.2

189.4

125.0

2009 2010 2011 2012 2013 2014 2015Dividends Capex Non controlling interests Deleverage

1. Capital expenditure net of disposals

Around 2.5x dividend cover Net debt/EBITDA 1.3x vs covenant of 3.5x

Page 14: THE HOME OF BETTING - William Hill Plcfiles.williamhillplc.com/media/4037/wmh-corporate-presentation-apr...THE HOME OF BETTING William Hill PLC corporate presentation ... Bet365 Non-reporting

14

Regulatory update

Responsible Gambling • £50 journey implemented, algorithms applied to identify possible harmful behaviour, national self-exclusion trial

UK: gaming machines • Triennial Review expected to start in the autumn

UK: funding for horseracing • 55th Levy Scheme: 10.75% rolled forward for Retail• Government policy to introduce ‘racing right’

UK: Scotland Bill • Scotland Bill at report stage. Grants powers to Scottish Government to regulate machine numbers for new LBOs

UK: 4th Money Laundering Directive

• Passed by European Parliament in June, may bring LBOs under its auspices for the first time. Impact on LBOs to be finalised during 2016

• Gambling Commission consultation on LCCP measures

Russia • Proposed legislation for payment blocking of online gambling companies without a land-based licence

Australia • Review of Interactive Gambling Act: report submitted to Government on 18 Dec 2015, awaiting Government response

US • En Banc in New Jersey case heard on 17 Feb 2016

Page 15: THE HOME OF BETTING - William Hill Plcfiles.williamhillplc.com/media/4037/wmh-corporate-presentation-apr...THE HOME OF BETTING William Hill PLC corporate presentation ... Bet365 Non-reporting

15

Compelling investment proposition

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