TIDMFLTR
RNS Number : 1861Y
Flutter Entertainment PLC
03 May 2023
3 May 2023
Q1 2023 Trading Update
Strong performance in US and Group ex-US driving revenue growth
of 46%
Flutter Entertainment plc (the "Group") announces a trading
update for three months ended 31 March 2023.
Unaudited GBPm Q1 2023 Q1 2022 YoY %
YoY % CC(1)
Average monthly players(2)
('000s) 12,349 9,522 +30%
Sports revenue 1,495 930 +61% +53%
Gaming revenue 916 636 +44% +35%
------- ------- ----- ------
Total revenue 2,411 1,566 +54% +46%
--------------------------- ------- ------- ----- ------
All commentary within this trading update refers to constant
currency (1) growth rates. Pro forma references include Sisal for a
full 3-month period in both 2022 and 2023. Any differences due to
rounding.
-- Group: Strong recreational customer growth across all divisions continued in Q1
- Average monthly players ("AMPs") of 12.3m, up 30%, driving revenue growth of 46% to GBP2.4bn
- Pro forma AMPs +20%, revenue +29%
-- US: Very strong performance with revenue +92% including
sportsbook revenue +147%; Q1 sports market share of 50%, 14pp
higher year-on-year; iGaming revenue growth of 43% and Q1 market
share 2pp higher than Q4 at 23%; remain firmly on track for full
year profitability in 2023
-- Group ex-US: Delivered good pro forma revenue growth of 8%,
driven by continued positive momentum in UK & Ireland (+17%)
and good growth in International (+6%), while performance in
Australia (-4%) remained resilient against challenging comparatives
with good customer growth
-- Sustainability: Positive Impact Plan continues to deliver for
customers, colleagues and communities. Welcome publication of UK
Government's Gambling Act Review. Proactive steps taken through
Play Well strategy are positioning Flutter well for future
change
-- US listing: Shareholder approval received at AGM; expect additional US listing in late Q4
Peter Jackson, Chief Executive, commented:
"The Group delivered a very strong Q1 performance with pro forma
revenue growth of 29% achieved through continued execution against
the Group's strategic priorities.
In the US, the combination of the FanDuel Advantage and the
Flutter Edge drove further market share gains. We added over 1.5m
customers in the quarter and we remain the clear market leader. Our
US sports betting handle of $10.9bn represented almost 60% of the
Group's total sportsbook stakes.
Outside of the US, pro forma revenue growth of 8% demonstrated
the benefits of diversification of our portfolio. We continued to
take share across our UK & Ireland and International businesses
while in Australia we did an excellent job defending our leadership
position. We remain delighted with the progress of Sisal since the
acquisition in August 2022.
In the UK, the publication of the White Paper has vindicated the
proactive actions we have taken to further embed safer gambling
across our organisation through our Play Well strategy. The changes
will bring consistency to safer gambling protections for customers
and make responsible play a priority across all operators, which we
strongly support.
We were also very pleased to receive overwhelming support among
our shareholders for the addition of a Flutter US listing. The
strategic and capital markets benefits this will bring to Flutter
will position the Group well for its next phase of growth."
Divisional analysis
Unaudited revenue Total Sports(5) Gaming Average monthly
GBPm players(2)
---------
Q1 2023 Q1 2022 YoY YoY YoY YoY Q1 2023 YoY %
% % % % (000s)
CC CC CC
------- --------- ------ ---------
US 908 429 +112% +92% +116% +43% 3,449 +46%
UK & Ireland 608 519 +17% +17% +17% +16% 4,024 +11%
- UK & Ireland
Online 532 453 +17% +17% +16% +17% 4,024 +11%
- UK & Ireland
Retail 77 65 +17% +15% +18% +10%
Australia 289 291 -1% -4% -4% 993 +9%
International 605 327 +85% +69% +187% +46% 3,884 +48%
------------------ ------- ------- ----- --------- ------ ---------
Group 2,411 1,566 +54% +46% +53% +35% 12,349 +30%
------------------ ------- ------- ----- --------- ------ ---------
Sisal, acquired in August 2022 has been included on a reported
basis within International. The pro forma references within the
commentary below include Sisal for a full 3-month period in both
2022 and 2023
US
As outlined at our November 2022 Capital Markets Day, the
FanDuel Advantage of (i) efficient player acquisition, (ii) strong
retention and, (iii) growth in customer value, which when combined
with the Flutter Edge, delivered another strong quarter with
revenue growth of 92%.
(i) Successful state launches in Ohio and Massachusetts drove a
20% increase in total new players, delivering number one positions
in both markets
(ii) Continued innovation of our market leading Same Game Parlay
products, including a broader offering on March Madness and in-play
NBA betting, supported strong retention with AMPs 46% higher
(iii) This product innovation contributed to a 240 basis point
increase in expected sportsbook net revenue margin in the quarter,
driving greater customer lifetime value
These sustainable advantages delivered sportsbook market share
gains of 14 percentage points versus the prior year to 50%(3) .
Sports revenue grew 116%, with sportsbook revenue 147% higher.
Sportsbook stakes increased 43% while sportsbook net revenue margin
increased 290 basis points year on year to 7.0%, benefitting from
80 basis points of favourable sports results in the quarter and
unfavourable results in the prior comparable period. The expected
sportsbook net revenue margin increase referenced above was
partially offset by increased generosity levels from the launch in
new states.
Our iGaming strategy is delivering results with AMPs 47% higher
and revenue growth of 43%. Product improvements in the FanDuel
Casino app engaged more direct casino customers, while the Reward
Machine free-to-play product drove an increase in player frequency.
This delivered a 200 basis point improvement in our iGaming market
share to 23% in the quarter(3) .
UK & Ireland
Online
Our UK & Ireland division continued to significantly
outperform the market with AMP growth of 11% to over 4m, and
revenue up 17%. This performance reflects the reshaping of our
business in recent years to focus on growing our recreational
customer base.
Sports revenue grew by 16% with an enhanced product offering
driving good retention of World Cup players from Q4 and strong
customer acquisition. Net revenue margin of 11.1%, was in line with
expectations, and 150 basis points higher than the prior year
driven by the continuing increase in the penetration of our
Betbuilder products.
Gaming revenue grew 17% continuing the strong momentum evidenced
in the second half of 2022 and helped in the quarter by enhanced
daily prize mechanics, with the introduction of bonus rounds and
guaranteed jackpots. Sky Vegas also benefitted from an expansion of
live casino content which boosted player engagement.
Retail
Retail revenue was up 15% as Paddy Power grew share across both
retail estates in the UK and Ireland. This growth reflects lower
prior year revenues as post Covid behaviour normalised , as well as
good customer engagement in the quarter driven by our leading
product and customer proposition.
Australia
Sportsbet delivered good player retention despite challenging
Covid comparatives with AMPs growing 9% year-on-year. Revenue
declined by 4% reflecting the unwind of the Covid frequency benefit
from the prior year. Sportsbet has grown both revenue and players
at a compound rate of 17% since 2019. Net revenue margin of 11.2%
was 30 basis points lower reflecting the increased investment in
promotional generosity to defend our leading position in a
competitive market.
International
Total Sports(5) Gaming Average monthly
players(2)
Q1 2023 Q1 2022 YoY YoY YoY YoY Q1 2023 YoY
Unaudited revenue % % % % (000s) %
GBPm CC CC CC
--------- ------
International reported 605 327 +85% +69% +187% +46% 3,884 +48%
International pro
forma 605 533 +14% +6% +17% +3% 3,884 +14%
----------------------- ------- ------- ---- ---- --------- ------ ----------
International reported revenue growth of 69% reflects the
acquisition of Sisal, acquired in August 2022. Pro forma revenue
grew 6%, driven by strong AMP growth of 14% to 3.9m. The previously
guided regulatory headwind from Russia and Ukraine had a limited
impact in the period with growth excluding these items of 8%(4)
.
The International division is at a growth inflection point, led
by our 'consolidate and invest' markets (4) , which accounted for
77% of International revenue, and grew at 20% in Q1. Sisal is
performing exceptionally well, benefitting from its inclusion into
the Flutter business. Excellent conversion of retail customers to
its range of online products, drove revenue in Italy +19%. Player
volumes benefited from Sisal's market leading proposition and the
record SuperEnalotto jackpot of over EUR370m, which was won during
February. Sisal also saw record cross sell rates, which led to good
growth in average player value. We also continued to successfully
scale our leading positions in high growth markets such as India
and Turkey, where revenues were up 65% and 107% respectively.
(1) Constant currency ("cc") growth is calculated by
retranslating the non-sterling denominated components of Q1 2022 at
Q1 2023 exchange rates. Growth rates in the commentary are in local
or constant currency.
(2) Average Monthly Players represent the average number of
players who have placed and/or wagered a stake and/or contributed
to rake or tournament fees during the month in the reporting
period. Average Monthly Player numbers now include Junglee players,
and Q1 2022 comparative figures have been adjusted to show a like
for like comparison.
(3) Online sportsbook and gaming market share is the GGR market
share of our sportsbook and gaming brands for Q1 2023 in the states
in which FanDuel was live, based on published gaming regulator
reports in those states.
(4) Guided headwinds reflect the effects of the war in the
Ukraine on our business in Russia and the Ukraine. Consolidate and
Invest markets in International are Italy, Spain, Georgia, Armenia,
Brazil, India and Turkey.
(5) Sports revenue includes revenue from sportsbook, exchange,
daily fantasy sports, advance deposit wagering and B2B product
verticals.
Analyst briefing:
The Group will host a questions and answers call for institutional
investors and analysts this morning at 9:00am (BST). To dial into
the conference call, participants need to register here where they
will be provided with the dial in details to access the call.
Contacts:
Investor Relations:
Paul Tymms, Group Director of IR and
FP&A + 44 75 5715 5768
Ciara O'Mullane, Investor Relations + 353 87 947 7862
Liam Kealy, Investor Relations + 353 87 665 2014
Press:
Kate Delahunty, Chief Communications
Officer + 44 78 1077 0165
Lindsay Dunford, Corporate Communications + 44 79 3197 2959
Rob Allen, Corporate Communications + 44 75 5444 1363
Billy Murphy, Drury Communications + 353 1 260 5000
James Murgatroyd, FGS Global + 44 20 7251 3801
------------------------------------------------- -------------------
About Flutter Entertainment plc:
Changing the Game
We are a global betting and gaming group with an ambition to
drive positive and sustainable change in our industry. Through our
world class brands we excite and entertain customers, while leading
the way in responsible play. Our strength is the Flutter Edge,
optimising the advantages of our global scale to drive business
performance and positive impact for our customers, colleagues and
communities.
We report as four divisions:
-- US: includes FanDuel, TVG, FOX Bet and PokerStars brands,
offering regulated real money and free-to-play sports betting,
online gaming, daily fantasy sports and online racing wagering
products to customers across various states in the US and
Canada.
-- UK & Ireland: includes the Sky Betting and Gaming, Paddy
Power, Betfair and Tombola brands offering a diverse range of
sportsbook, exchange and gaming services across the UK and Ireland,
along with over 600 Paddy Power betting shops.
-- Australia: the Sportsbet brand offers online sport betting.
-- International: includes PokerStars, Sisal, Adjarabet, Betfair
and Junglee operating in multiple jurisdictions around the world
offering a diverse range of sportsbook, exchange and gaming
services.
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END
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