[PPT] - 2 0 1 8 fj n a l r e s u l t s 53 weeks ended 1 PowerPoint Presentation

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53 weeks ended 1 January 2019 1 March 2019

2 1 8 fj n a l r e s u l t s

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William Hill PLC Cautionary note regarding forward-looking statements This presentation has been prepared by William Hill PLC (“William Hill”). It includes statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements can be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "anticipates", "expects", "intends", "plans", "goal", "target", "aim", "may", "will", "would", "could" or "should"

r, in each case, their negative or other variations or comparable terminology. They appear in a number of places throughout this

presentation and the information incorporated by reference into this presentation and may include statements regarding the intentions, beliefs or current expectations of the Directors, William Hill or the Group concerning, amongst other things: (i) future capital expenditures, expenses, revenues, earnings, synergies, economic performance, indebtedness, financial condition, dividend policy, losses and future prospects; (ii) business and management strategies, the expansion and growth of the Group’s business operations; and (iii) the effects of government regulation and industry changes on the business of William Hill, the Group. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on 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. The Group's actual results of operations, financial condition, liquidity, 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. Any forward-looking statements made by or on behalf of the William Hill Group speak only as of the date they are made and are based upon the knowledge and information available to the Directors on the date of this presentation, and are subject to risks relating to future events, other risks, uncertainties and assumptions relating to William Hill’s operations and growth strategy, and a number of factors that could cause actual results and developments to differ materially from those expressed or implied by the forward-looking statements. Undue reliance should not be placed on any forward-looking statements. Before making any investment decision in relation to William Hill you should specifically consider the factors identified in this document, in addition to the risk factors that may affect William Hill’s

perations which are described under “Managing our risks” in the Company’s 2018 Annual Report.

Subject to the requirements of the FCA, the London Stock Exchange, the Market Abuse Regulation (596/2014), the Listing Rules and the Disclosure and Transparency Rules (and/or any regulatory requirements) or applicable law, William Hill explicitly disclaims any obligation

r undertaking publicly to release the result of any revisions to any forward-looking statements in this presentation. No statement in this

document is intended as a profit forecast or profit estimate and no statement in this document should be interpreted to mean that the earnings per share of William Hill as altered by the presentation will necessarily match or exceed the historical or published earnings per share of William Hill.

D i s c l a i me r

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F

c

u s i n g

n

t h e

p

p

r

t u n i t y

D r i v i n g d i g i t a l g r

wt

h i n t h e UK a n d i n t e r n a t i

n

a l l y R e mo d e l l i n g R e t a i l G r

wi

n g a b u s i n e s s

f

s c a l e i n t h e US D e l i v e r i n g

n
u

r a mb i t i

n

t h a t n

b
d

y i s h a r me d b y g a mb l i n g

BUILD A DIGITALLY LED, INTERNATIONALLY DIVERSE GAMBLING COMPANY TO DOUBLE GROUP OPERATING PROFIT BETWEEN 2018 AND 2023

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2 1 8

p

e r a t i

n

a l h i g h l i g h t s

O n l i n e R e t a i l US G r

u

p

Good underlying growth, actives +25% year-on-year, mass market focus
Acquisition of Mr Green: International Online hub, extended European

reach, increased diversification, multi-brand opportunity

Robust performance in challenging trading conditions
Ready to implement changes in response to B2 staking limit
Sixth consecutive year of double-digit revenue growth in Nevada
Only company live in seven regulated states, rapid progress on market

access, early launch of mobile

Sale of Australia: increased management focus, stronger balance sheet
Transformation programme is substantially complete
Nobody Harmed: whistle-to-whistle voluntary advertising ban

SLIDE 5

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Ruth Prior, CFO

F i n a n c i a l r e v i e w

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G r

u

p i n c

me

s t a t e me n t

53 weeks ended 1 Jan 2019

Exc. US

Expansion £m 53 weeks ended 1 Jan 2019 US Expansion £m 53 weeks ended 1 Jan 2019

Inc. US

Expansion £m 52 weeks ended 26 Dec 2017 £m % change

Ne t r e v e n u e 1 , 6 9 . 5 1 1 . 8 1 , 6 2 1 . 3 1 , 5 9 2 . 8 + 2 % Cost of sales (388.1) (1.6) (389.7) (383.5) +2% G r

s

s p r

fj

t 1 , 2 2 1 . 4 1 . 2 1 , 2 3 1 . 6 1 , 2 9 . 3 + 2 % Net operating expenses (954.6) (43.4) (998.0) (935.5) +7% Ad j u s t e d

p

e r a t i n g p r

fj

t 2 6 6 . 8 ( 3 3 . 2 ) 2 3 3 . 6 2 7 3 . 8

1

5 % Exceptional items and adjustments1 (921.5)

(921.5)

(90.9) ( L

s

s ) / p r

fj

t b e f

r

e i n t e r e s t a n d t a x ( 6 5 4 . 7 ) ( 3 3 . 2 ) ( 6 8 7 . 9 ) 1 8 2 . 9 Net finance costs (34.0) (36.4)

7%

( L

s

s ) / p r

fj

t b e f

r

e t a x ( 7 2 1 . 9 ) 1 4 6 . 5 Tax 5.8 (4.1) ( L

s

s ) / p r

fj

t f r

m

c

n

t i n u i n g

p

s ( 7 1 6 . 1 ) 1 4 2 . 4 Profit/(loss) from discontinued ops 3.8 (225.6) ( L

s

s ) / p r

fj

t f

r

t h e p e r i

d

( 7 1 2 . 3 ) ( 8 3 . 2 ) (Loss)/earnings per share (p) 2 (83.6) 16.6

Slide provides an overview of results with both adjusted and statutory measures. Following slides on divisional performance reflect adjusted results, since that is how performance is internally managed and reported

1.

Total exceptional items and adjustments of £922.1m disclosed in note 3 of the 2018 annual report includes £0.6m of finance costs

2.

(Loss)/earnings per share and adjusted EPS figures are both calculated based on adjusted profit from continuing operations only

Good underlying growth

ffset by enhanced

customer due diligence in

Online. Resilient Retail in

tough trading environment £882.8m impairment of Retail, £31.2m for transformation programme Full-year dividend in line with policy to pay out c50% of adjusted earnings

excl. US expansion

£17m reduction from Online customer due diligence, includes US Expansion losses of £33.2m 2017 includes Australia impairment charge

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Strong actives growth, particularly in gaming ARPU reflects targeting of mass market customers Reduced CPA due to volume acquisition and increased marketing efficiency

O n l i n e KP I s – ma s s ma r k e t mo me n t u m

Ke y p e r f

r

ma n c e i n d i c a t

r

s 2018 2017 % 2018 2017 %

Net revenue (£’m) 4 8 4 . 475.0 +2% 1 5 . 4 141.9 +6% Unique actives (’000) 2 , 3 9 . 7 1,914. 2 +25 % 5 8 8 . 4 474.2 +24% New accounts (’000) 8 3 4 . 8 760.3 +10 % 2 7 3 . 1 249.9 +9% Average revenue per user (£) 2 2 248

19%

2 5 6 299

14%

Average cost per acquisition (£) 1 3 3 136

2%

1 3 3 142

6%

UK International

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8

O n l i n e – g

d

u n d e r l y i n g p e r f

r

ma n c e , i mp a c t e d b y e n h a n c e d c u s t

me

r d u e d i l i g e n c e

Sportsbook: UK -1%, International +20% Gaming: UK +5%, International -5% Good margin driven by favourable pre-match football results

2018 £m 2017 £m % change

Sportsbook amounts wagered 4,702.8 4,735.6

1%
Sportsbook gross win margin

8.0% 7.6% +0.4 ppts

Sportsbook net revenue 318.7 308.3 +3% Gaming net revenue 315.7 308.6 +2% Ne t r e v e n u e 6 3 4 . 4 6 1 6 . 9 + 3 % Cost of sales (154.1) (144.6) +7% G r

s

s p r

fj

t 4 8 . 3 4 7 2 . 3 + 2 % Operating costs (350.1) (339.8) +3%

Employee costs

(45.2) (51.6)

12%
Marketing

(147.7) (138.7) +6%

Finance charges

(18.6) (19.0)

2%
Depreciation and amortisation

(39.0) (35.0) +11%

Other costs incl. recharges

(99.6) (95.5) +4% Ad j u s t e d

p

e r a t i n g p r

fj

t 1 3 . 2 1 3 2 . 5

2

%

Adjusted operating profit margin 20.5% 21.5%

1.0 ppt

Annualisation of the horseracing levy (Apr 17) and Remote Gaming Duty on free bets (Oct 17) Impacted by enhanced customer due diligence. On an adjusted basis, Sportsbook wagering grew 2% Increased marketing costs predominantly due to World Cup. Marketing spend represents 23% of net revenue (2017: 22%) £4m increase in allocation of central costs Underlying operating profit growth of 11% When adjusted for customer measures, underlying net revenue grew +6%

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9

R e t a i l – s t r

n

g c a s h g e n e r a t i

n

2018 2017 % change

Average no. of LBOs 2 , 3 3 3 2,362

1%

Average no. of machines 9 , 2 2 9 9,313

1%

Gross win / machine / week3 £ 1 , 1 5 £1,028

1%

Gaming gross win margin 3 . 7 9 % 3.67% +0.12 ppts

1.

Includes amounts wagered over-the-counter and on Self-Service Betting Terminals (SSBTs)

2.

Cash generated is calculated as Adjusted operating profit plus depreciation and amortisation, less cash capex and exceptional cash cost

3.

Excludes free bets

Costs closely controlled, despite inflation and impact of National Living Wage Wagering affected by increased race abandonments and challenging high street conditions, as well as rolling over a period where we had the advantage of excusive media content

2018 £m 2017 £m % change

Sportsbook amounts wagered1 2,195.9 2,310.4

5%
Sportsbook gross win margin

18.2% 18.0% +0.2 ppts

Sportsbook net revenue 398.9 415.4

4%

Gaming net revenue 496.3 497.7

0%

Ne t r e v e n u e 8 9 5 . 2 9 1 3 . 1

2

% Cost of sales (226.6) (233.6)

3%

G r

s

s p r

fj

t 6 6 8 . 6 6 7 9 . 5

2

% Operating costs (518.3) (518.6)

0%
Employee costs

(191.9) (198.7)

3%
Property costs

(104.7) (102.1) +3%

Content costs

(82.8) (76.6) +8%

Depreciation and amortisation

(29.8) (33.0)

10%
Other costs incl. recharges

(109.1) (108.2) +1% Ad j u s t e d

p

e r a t i n g p r

fj

t 1 5 . 3 1 6 . 9

7

% C a s h g e n e r a t e d 2 1 5 4 . 5 1 4 7 . 5 + 5 % Increase due to additional live content and inflation Decrease following Retail impairment

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US u p d a t e

NV NJ online NJ retail WV2 MS PA DE RI Total

1,442.8 62.6 146.4 43.1 41.5 6.7 115.3 14.6 1,873.0 7.2% 6.6% 6.5% 9.8% 10.8% 4.9% 18.0% 8.4% 8.0% 32% 8% 37% 95% 36% 32% 100% 100% 34%

        

Handle ($m) Gross win margin Market share1 Direct revenue3 Service provider revenue3

Operator Service Provider Lottery

Direct handle of $1,655m $3.5m income derived from indirect handle of $218m

1.

Market share figures calculated using monthly data from state regulators for calendar year 2018 and company data

2.

West Virginia, William Hill is both operator and service provider, depending on the contract

3.

Both of these are recognised as net revenue in the financial statements

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Wi l l i a m H i l l US ( l

c

a l c u r r e n c y ) – d

u

b l e

d

i g i t r e v e n u e a n d p r

fj

t g r

wt

h

US Existing US Expansion Retail US Expansion Online US Expansion Total Total US Total US 2018 $m 2018 $m 2018 $m 2018 $m 2018 $m 2017 $m % change

Amounts wagered 1,442.8 149.9 62.6 212.5 1,655.3 1,152.7 +44%

Gross win margin

7.2% 6.7% 6.6% 6.7% 7.2% 6.3% +0.9 ppts Direct revenue 104.1 9.9 3.5 13.4 117.5 72.9 +61% Service provider revenue 1.9 1.8 0.0 1.8 3.7 1.8 +106% Ne t r e v e n u e 1 6 . 1 1 . 7 3 . 5 1 5 . 2 1 2 1 . 2 7 4 . 7 + 6 2 % Cost of sales (9.8) (1.5) (0.5) (2.0) (11.8) (6.4) +84% G r

s

s p r

fj

t 9 6 . 2 1 . 2 3 . 1 3 . 2 1 9 . 4 6 8 . 3 + 6 % Operating costs1 (52.6) (8.2) (15.8) (56.9) (109.5) (45.5) +141% O p e r a t i n g p r

fj

t $ m 4 3 . 6 2 . ( 1 2 . 8 ) ( 4 3 . 7 ) ( . 1 ) 2 2 . 8

1

% O p e r a t i n g p r

fj

t £ m 3 2 . 6 1 . 5 ( 9 . 7 ) ( 3 3 . 2 ) ( . 6 ) 1 7 . 7 C a p i t a l i n v e s t me n t $ m 3 . 4 6 . 7 1 7 . 6 2 5 . 9 2 9 . 3 2 . 5

1.

Total US Expansion operating costs includes central costs that are not directly attributable to either Retail or Online

Derived from c$218m in handle and c$34m in hold across William Hill

perations

US Existing handle +25% driven by +42% mobile growth US Expansion

perating costs in line

with guidance

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12

2018 £m 2017 £m C a s h g e n e r a t i

n

Adjusted operating profit 233.6 273.8 Depreciation and amortisation 73.6 72.2 Non-cash share remuneration charge 5.5 5.2 E B I T D A 3 1 5 . 2 3 5 6 . Cash exceptional items & working capital (65.7) (3.9) Interest and tax (46.9) (64.7) Pension scheme deficit funding (8.5) (9.6) Capital and investing receipts 230.1 14.6 Capital expenditure (117.3) (84.1) Other 5.5 (0.4) Discontinued operations (1.9) 8.7 F r e e C a s h F l

w

3 8 . 2 1 1 . 8 Us e s

f

c a s h Dividends (113.5) (108.1) Other (1.9)

Ne

t C a s h F l

w

1 9 2 . 6 1 3 . 7

C

n

s i s t e n t l y s t r

n

g

p

e r a t i

n

a l c a s h fm

w

Cash capex 2018 £m 2017 £m Online 51.4 43.3 Retail 21.5 28.6 US 28.5 1.9 IT / other 15.9 10.3 Total capex 117.3 84.1

c£65m outflow due to exceptional spend on the transformation programme and the settlement of various provisions and accruals including indirect tax liabilities taken in 2017 Sale of Australia and NYX Tax payments down c£17m due to sale of Australia, lower US profits and an offset in 2018 of prior year

verpayments in the UK and Gibraltar

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13

Dividend F u l l

y

e a r d i v i d e n d

f

1 2 . p p e r s h a r e 2 1 9

n

wa r d s d i v i d e n d c a l c u l a t e d a t c 5 %

f

G r

u

p

p

e r a t i n g p r

fj

t , i n c l u d i n g US E x p a n s i

n

, u n d e r p i n n e d a t 8 p p e r s h a r e Guidance update since November G

v

e r n me n t t i me t a b l e f

r

T r i e n n i a l R e v i e w a n d R G D c h a n g e s b r

u

g h t f

r

wa r d t

Ap

r i l 2 1 9 R e t a i l : e a r l i e r i mp l e me n t a t i

n

l i k e l y t

b

r i n g 2 1 9 wi t h i n

n

g

i

n g £ 5

7

m a d j u s t e d

p

e r a t i n g p r

fj

t r a n g e , mi t i g a t i

n

b e n e fj t s l i k e l y t

b

e we i g h t e d t

wa

r d s t h e e n d

f

t h e y e a r O n l i n e : e a r l i e r i n c r e a s e t

R

G D r e d u c e s a d j u s t e d

p

e r a t i n g p r

fj

t b y c £ 1 m The effective tax rate for 2019 is expected to be c12% The impact of IFRS 16 will increase adjusted operating profit by c£2-3m Net debt to EBITDA of 1.0x at 1 January 2019

B a l a n c e s h e e t a n d g u i d a n c e u p d a t e

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14

O p e r a t i n g r e v i e w a n d s t r a t e g y

Philip Bowcock, CEO

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15

Ac c e l e r a t i n g

u

r s t r a t e g y t

b

e c

me

d i g i t a l l y l e d a n d i n t e r n a t i

n

a l l y d i v e r s e

Investing in US Expansion as a start-up business Building a modern technology stack for the US Acquiring Mr Green for ROW expansion

2 1 8 a c t u a l r e v e n u e s p l i t 2 1 9 e x p e c t e d r e v e n u e s p l i t

Retail US Online UK Online Int’l Retail US Online UK Online Int’l Retail

F

c

u s i n g

n

t h e f u t u r e

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D i g i t a l s t r a t e g y

Market leading mobile sportsbook
Clear William Hill brand position

and strong value perception

Advanced Customer Lifetime

Management capabilities and focus on incremental gains

International expansion

D R I V E C US T O ME R E NG AG E ME NT T H R O UG H … D R I V E O P E R AT I O NAL E X C E L L E NC E T H R O UG H …

B UI L D T H E WO R L D ’ S MO S T T R US T E D D I G I T AL G AMB L I NG B R AND

S T R AT E G I C G O AL S

D R I V E R E V E NU E T H R O UG H …

Creating a personalised customer

relationship with William Hill

Fair and robust compliance and

customer protection

Significantly improved customer

experience across all touch points

Investment in talent and
rganisational capabilities
Improved marketing effectiveness
Evolving operating models,

simplified ways of working and focus on automation

Right-sized cost base
Focus on core business and

utilise best in class external tools

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17

Opened London hub Closed Tel Aviv Expanding Krakow

P e

p

l e a n d

r

g a n i s a t i

n
Refocusing Gib team
n the UK market
Establishing Malta as
ur international hub
Building out key

capabilities

‒

Product

‒

Data

‒

Brand

‒

Compliance

‒

Customer operations

L

n

d

n

: T e c h , d i g i t a l ma r k e t i n g s e r v i c e s G i b r a l t a r : UK O n l i n e Ma l t a : I n t e r n a t i

n

a l O n l i n e S t

c

k h

l

m: MR G G a me t e k S

fj

a : Mu l t i

l

i n g u a l c u s t

me

r s e r v i c e Ma n i l a : E n g l i s h l a n g u a g e c u s t

me

r s e r v i c e L e e d s : T r a d i n g Kr a k

w:

T e c h n

l
g

y

SLIDE 18

18

P r

d

u c t

Strategic Product Council introduced New Live Casino studios and lobby 500 new games launched Automated bet abandonment, faster settlement Smart data platform enabling real-time learning

Ma r k e t i n g

Customer satisfaction index at an all-time high Data standardisation for better attribution marketing Work on new brand positioning

R e s p

n

s i b l e g a mb l i n g

Expanded Responsible Gambling and Compliance teams and customer interactions Advanced daily algorithm to identify at-risk customers

E y e s

n

t h e c u s t

me

r

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19

Mr Green acquisition completed in January 2019
Integration underway
Revenue growth of 40% in 2018
Now licensed in seven countries – MRG awarded a licence in Sweden
n 13 December 2018
Launching williamhill.se in Q2 2019
Appointed International Online Managing Director

c24%

International as a percentage

f 2018 Online net revenue

c35%

International as a percentage of 2018 Online pro forma net revenue

D r i v i n g i n t e r n a t i

n

a l g r

wt

h

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20

US s t r a t e g y

William Hill brand where possible
Use ‘powered by’ strategy when not

possible

Seek media partnership(s) to

access sports betting audience

Partner brands and database

leveraged where possible D i g i t a l

Creation of a digital hub in New

Jersey

Introduce a new proprietary tech

platform in 2019 R e t a i l

Leverage expertise and trust
Proven ability to become
perational quickly as states

regulate

Eldorado: anchor partner with

access to 13 states

IGT: exclusive partner on lottery
pportunities
Golden Entertainment: enhancing

Nevada and adding two more states

‘Switzerland’ strategy with other
perators to extend reach

O P E R AT I O NAL E X C E L L E NC E MAR KE T AC C E S S B R AND AND MAR KE T I NG

T O B E T H E US MAR KE T L E AD E R

S T R AT E G I C G O AL S

SLIDE 21

21

Ne v a d a

Launch: Jun 2012 Model: OP, SP Retail, Online Market size1: $301m William Hill share2:32%

1.

Market share figures calculated using monthly data from state regulators for calendar year 2018 and company data

2.

William Hill market share measured by revenue

Ma r k e t a c c e s s

P e n n s y l v a n i a

Launch: Nov 2018 Model: SP Retail Market size: $3m William Hill share: 32%

D e l a wa r e

Expanded: Jun 2018 Model: LT Retail Market size: $21m William Hill share: 100%

R h

d

e I s l a n d

Launch: Dec 2018 Model: LT Retail Market size: $1m William Hill share: 100%

We s t V i r g i n i a

Launch: Aug 2018 Model: OP, SP Retail Market size: $7m William Hill share: 95%

Mi s s i s s i p p i

Launch: Aug 2018 Model: OP Retail Market size: $15m William Hill share: 36%

Ne w J e r s e y O n l i n e

Launch: Sep 2018 Model: OP Online Market size: $54m William Hill share: 8%

Ne w J e r s e y R e t a i l

Launch: Jun 2018 Model: OP Retail Market size: $41m William Hill share: 37%

Only company live in all seven regulated legal states Access secured to 17 states, 15 of those expected to regulate in first 2-3 years c$430m of wagering handled in US Expansion states in H2 Strategic partnership with Eldorado Resorts, and partnerships with Golden Entertainment, IGT and Prairie Meadows 29 further states with pending sports betting legislation

Ke y :

O P

perator

S P service provider L T lottery

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22

US Existing amounts wagered CAGR 26% since 2012 Expanding presence in New Jersey and Nevada New Jersey team includes digital marketing, digital operations, local customer support, product / design / development, payments, and compliance New hires include Digital President and Chief Marketing Officer Integration of delivery for both online and retail New technology platform will deliver increased reliability, flexibility and product capability

O p e r a t i

n

a l e x c e l l e n c e

US a mo u n t s wa g e r e d g r

wt

h ( $ m)

SLIDE 23

23

B r a n d a n d ma r k e t i n g

1.

From the New Jersey Sports Betting Brand & Media Tracker. Survey among NJ residents 21+ that are not sports gambling rejectors. Data represented as past 7 or 14 day average (depending on base size for period) based on the question: Which of the following sport betting companies are you aware of? (Aided Awareness).

Brand awareness up to 22% in February 20191
Marketing in New Jersey across a variety of

channels:

‒

TV

‒

Radio

‒

Digital

‒

Street teams

Leveraging perception of trust and heritage

associated with William Hill brand

Strong focus on community and educating the

sports fan

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24

R e mo d e l l i n g R e t a i l

Gaming

R e a d y f

r

£ 2 i mp l e me n t a t i

n
n

1 Ap r i l B 3 c

n

t e n t i n c r e a s e d t

3

8 %

f

g a mi n g r e v e n u e s

SSBTs

1 5 %

f

t

t

a l s t a k e s a n d

v

e r 5 %

f

f

t

b a l l s t a k e s f r

m

S S B T s S e v e n n e w s p

r

t s , 1 8 i n t

t

a l a n d c u s t

me

r f e a t u r e s , e . g . , B e t t i n g B u d d y 6 1 1 n e w t e r mi n a l s r

l

l e d

u

t i n y e a r , b r i n g i n g t

t

a l t

3

, 7 7 2

SSBT image

SLIDE 25

25

No b

d

y H a r me d : wh i s t l e

t
wh

i s t l e a d v e r t i s i n g b a n

Voluntary whistle-to-whistle advertising ban Industry-wide initiative agreed ahead of any regulation Responds to concerns about tone, volume and impact on young people A big and visible step towards our Nobody Harmed ambition Reduction in reach pre-watershed

SLIDE 26

26

S u mma r y

Good underlying top line momentum in Online

Mr Green provides a base for accelerated international growth

Retail ready for new £2 stake limit and to compete for market share
Seizing the emerging opportunity in the US
Pipeline of safer gambling measures for customers

SLIDE 27

27

Philip Bowcock, CEO Ruth Prior, CFO

Q &A

SLIDE 28

28

Ap p e n d i c e s

SLIDE 29

29

G l

s

s a r y

Adjusted results Adjusted results means results before exceptional items and adjustments, as described in note 3 to the financial statements Amortisation Where operating expenses, operating profit or EPS are adjusted for amortisation, this pertains to amortisation of intangibles recognised on acquisition Amounts wagered This is an industry term that represents the gross takings on sports betting ARPU Average net revenue per user Adjusted earnings per share (EPS) Adjusted EPS is based upon adjusted profits after tax. Further detail on adjusted measures is provided in note 3 to the financial statements Basic EPS Basic EPS is based on an average of 856.9 million shares for 2017 and an average of 871.8 million shares for 2016 Cost per acquisition (CPA) Marketing costs (including affiliates but excluding FVAs) divided by the number of new accounts recorded in the period EBITDA Earnings before interest, tax, depreciation and amortisation. EBITDA for covenant purposes is adjusted earnings before depreciation and amortisation, and share remuneration charges FVAs Fair value adjustments. These are principally free bets, which are recorded as a cost between gross win and net revenue Gross win Gross win is an industry measure calculated as total customer stakes less customer winnings. It differs from net revenue in that it is stated prior to deductions for free bets and customer bonuses Gross win margin / net revenue margin This is a measure, inter alia, of the effect of sporting results on the business. The margin is defined as gross win/net revenue as a percentage of amounts wagered. The margin is also affected by the mix of products with different margins and the amount of concessions or free bets offered to customers Adjusted operating profit Adjusted operating profit is defined as profit before interest and tax, excluding exceptional items and other defined

adjustments. Further detail on adjusted measures is provided in note 3 to the financial statements

OTC Retail over-the-counter largely constitutes bets placed on sporting events, virtual events and lottery-style numbers games Net debt for covenant purposes Borrowings plus counter-indemnity obligations under bank guarantees less cash adjusted for customer funds and other restricted balances. Further detail is provided in note 23 to the financial statements Net revenue This is an industry term equivalent to ‘Revenue’ as described in the notes to the financial statements. It is equivalent to gross win less fair value adjustments, which are principally free bets New accounts Customers who registered and deposited within the reporting period PBIT Profit before interest and tax Sportsbook Bets placed and accepted by Online on sporting and other events, or via OTC and SSBTs in Retail SSBT Self-service betting terminal Unique active players Customers who placed a bet within the reporting period