Date: 25.09.2023

by Mateusz Mazur

Entain’s Trading Update and Forward Strategy for FY 2023

Entain, the global sports-betting, gaming, and interactive entertainment conglomerate, has offered a comprehensive update on its current trading performance and FY 2023 guidance.

Additionally, the company plans to keep its shareholders informed about ongoing efforts to boost operational efficiency and enhance shareholder value.

Unfavourable Sporting Results

Regarding current trading, post-summer results in Online Net Gaming Revenue (NGR) have been mixed across the group, falling slightly short of expectations.

In Q3, Online NGR growth is projected to be in the high single-digit percentage range and down by a high single-digit percentage on a proforma basis. This can be attributed to a combination of factors, including unfavourable sporting results in September, the widespread implementation of industry-leading safer gambling measures, and extended regulatory challenges, particularly in the UK. Slower growth than anticipated has also been noted in Australia and Italy.

Robust Performance of SuperSport

Despite these challenges, there has been noteworthy underlying Online growth when regulatory impacts are excluded. The quarter has witnessed strong proforma growth in active customers.

Moreover, recent acquisitions, most notably SuperSport in Croatia, have demonstrated robust performances. Retail operations have maintained their strength, and BetMGM in the US is progressing favorably, with a positive EBITDA expected in H2 2023.

Furthermore, FY2023 NGR is anticipated to be at the upper end of the $1.8-$2.0 billion guidance range, aided by the successful rollout of Single Account Single Wallet and online sportsbook enhancements during the NFL season.

Looking ahead to FY2023, Group Online NGR is expected to exhibit low double-digit percentage growth, while proforma NGR is projected to decrease in the low single-digit percentage range.

Entain reaffirms its expectation for FY2023 EBITDA to fall within the range of £1.00 billion to £1.05 billion, underpinned by robust operational controls.

Operational Strategy

In terms of accelerating operational strategy and performance, Entain has undergone significant strategic transformations over the past three years. These efforts have improved earnings quality and aligned operations to maximize long-term shareholder value.

The company intends to share further details about these initiatives in its Q3 trading update on November 2, 2023. The focus will include:

  1. A comprehensive market review, concentrating on long-term sustainable organic growth opportunities.
  2. Streamlining group structures and operations to enhance operational leverage and reduce costs.
  3. A plan for migrating acquired businesses onto the group’s industry-leading technology platform.
  4. Optimization of capital allocation priorities.
  5. Progress toward achieving the Group’s Online EBITDA margin target of 30%.

Jette Nygaard-Andersen, CEO of Entain, expressed confidence in the company’s ability to deliver on its strategic objectives despite challenges, stating “We continue to see good underlying growth in our online business and are reiterating our EBITDA guidance for the year despite softer than expected revenue growth in Q3 and the ongoing roll-out of industry-leading safer gambling measures. We continue to attract more customers than ever before to enjoy our products and services. BetMGM remains on track to deliver positive EBITDA in H2 and a full year NGR performance at the top end of our expectations, and we are particularly excited about the product improvements that we are rolling out over the NFL season.

We have made significant changes to the Group over the last three years. Our focus now is on accelerating the actions we are taking to drive sustainable organic growth, expand our margins, capitalise on the US opportunity and deliver long-term returns for our shareholders. We remain confident in our ability to deliver on the vast opportunities ahead of us, and look forward to sharing more detail about the changes that we are making alongside our Q3 trading update in November.”