Announces Fiscal Year 2023
earnings:
March 26, 2024: Flutter Entertainment (LSE:FLTR; NYSE:FLUT),
the world's leading online sports betting and iGaming operator,
today announced results for fiscal year ended December 31,
2023. Guidance for fiscal year ending 31 December 2024 introduced,
with Group revenue growth of 17.5% at the
midpoint.
Key
financial highlights:
|
In
$ millions except percentages and AMPs
|
Fiscal year
ended December,
31
|
2023
|
2022
|
YOY
|
|
|
|
|
|
|
Average monthly players
('000s)1
|
12,325
|
10,245
|
+20.3%
|
|
Revenue
|
11,790
|
9,463
|
+24.6%
|
|
Net loss
|
(1,211)
|
(370)
|
(227.3%)
|
|
Further Adjusted EBITDA2
|
1,874
|
1,289
|
+45.4%
|
|
Further Adjusted EBITDA
Margin2
|
15.9%
|
13.6%
|
+230bps
|
|
Net loss per share
|
$(6.89)
|
$(2.44)
|
(182.4%)
|
|
Adjusted Earnings per share
($)2
|
$3.51
|
$2.79
|
+25.8%
|
|
Net cash provided
by operating
activities
|
937
|
1,163
|
(19.4%)
|
|
Adjusted Free Cash
Flow2
|
938
|
576
|
+62.8%
|
|
Leverage
ratio2,3
|
3.1x
|
4.4x
|
(1.3x)
|
|
·
Excellent delivery against Group strategy drove
AMPs +20.3% and revenue +24.6% year on year
·
US business rapidly scaling with revenue +40.7%
and first year of positive Adjusted EBITDA:
‒ Product innovation helped add 3.7m new customers at attractive
projected payback periods4
‒ Continued #1 sportsbook position with sports net gaming
revenue (NGR) share 53.4%; (Gross gaming revenue (GGR) share 43.2%)
in Q4 20235
‒ FanDuel #1 iGaming brand as of January 2024; US GGR share
25.7% in Q4 20235
·
Outside of the US, diversified portfolio delivered
AMPs +15.0% and revenue +16.4% year on year:
‒ Strong
UKI performance added 2 percentage points of GGR market
share6 to 30%
‒ "Local
hero" strategy drove growth in International "Consolidate and Invest"7
markets, while division also benefited from full year consolidation
of Sisal acquisition
‒ This
strong growth more than offset a softer Australian racing market in
2023, and the unwind of the prior year benefit from increased
player engagement following Covid related restrictions
2023 financial overview
·
Net loss of $1,211m reflected strong performance
described above, but after non-cash charges of $1,681m due to (i)
$725m PokerStars trademark impairment reflecting greater emphasis
on revised "local hero" strategy; (ii) $791m acquired intangibles
amortization; and (iii) $165m fair value change on Fox Option
liability, (IFRS net loss $981m)
·
Group Further Adjusted EBITDA2 (excl. share based payments) of $1,874m,
+45.4% year on year:
‒ US
Adjusted EBITDA of $65m, Further Adjusted EBITDA of $167m despite
significant Q4 2023 customer friendly sports results
‒ Group
Ex-US Adjusted EBITDA2 of $1,613m, which on an IFRS
basis was £1,444m in line with previous IFRS guidance8,
Group Ex-US Further Adjusted EBITDA of $1,707m +10.0% year on
year
·
Group Further Adjusted EBITDA Margin2 accretion +230bps
to 15.9%, despite ongoing US investment
·
Net cash provided by operating activities -19.4%
to $937m primarily from Sisal's record lottery jackpot which
accrued in 2022 and resulted in a payment when won in February
2023
·
Strong cash conversion and balance sheet
position with Adjusted Free Cash
Flow2 +62.8% year on year and leverage
ratio2,3 at December 31, 2023 of 3.1x compared with 4.4x
at December 31, 2022
2024 trading to date
·
Strong trading year to date with Group revenue
growth of 23.4% from January 1, 2024 to March 17, 2024 versus prior
comparable period
·
US revenue growth of 55.6%, with sportsbook +63.7%
driven by staking growth and a 230bps improvement in sportsbook net
revenue margin driven by structural margin improvements and higher
promotional spend in the prior year on new state launches; iGaming
+50.3% carrying product driven momentum into 2024
·
Group Ex-US revenue growth of 6.3% benefited from
diversified geographic portfolio with UKI +17.3%, International
+3.0% impacted by unfavorable sports results and
Australia -8.8%
2024 Outlook
·
Guidance for the full year 2024 introduced with
implied Group revenue growth of 17.5% and Further Adjusted EBITDA
growth of 30.2% at midpoint:
‒ US
revenue $5.8bn to $6.2bn, +36.3% year on year at
midpoint
‒ US
Further Adjusted EBITDA $635m to $785m, +206.1% year on year at
midpoint
‒ Group
ex US revenue $7.65bn to $8.05bn, +6.3% year on year at
midpoint
‒ Group
ex US Further Adjusted EBITDA $1.63bn to $1.83bn, +5.4% year on
year at midpoint
·
Medium-term leverage ratio target updated to 2-2.5x
(from previous target of 1-2x)2,3 to reflect
Group earnings and cashflow
potential
Peter Jackson CEO commented:
"Flutter delivered a strong 2023 performance
as we continued
to deliver on our strategy. This was underpinned by a localized
approach to technology and product coupled with the unique scale
advantages of the Flutter Edge. As anticipated,
our number one position in the
US has transformed the Group's
earnings profile during 2023 as FanDuel delivered a positive US
full year Adjusted EBITDA for the first time. Outside of the US we made excellent progress integrating
Sisal into our International business, a business which is a great
example of our "local hero" strategy at work, and took market share
in UKI. We also made further
progress on our sustainability strategy with an increase in Play
Well safer gambling tool usage, investment of over $100m in our
global safer gambling initiatives including key marketing campaigns
in the US with our FanDuel ambassadors to promote responsible play
during the year.
I
was proud to see
Flutter shares
trading for the first time on the NYSE on January 29, 2024 and we
have been encouraged by the increased focus from new US investors
as a result of our US listing. We are working towards a shareholder
vote on May 1, 2024 to approve our primary listing move to
NYSE.
The year has started well with very good momentum continuing
into Q1. Record Super Bowl engagement
contributed to US revenue growth of 55.6% for the period from
January 1, 2024 to March 17, 2024. We also launched in North
Carolina where we have been really pleased with performance to
date. Outside of the US, revenue grew 6.3% as the market driven
decline in Australia was more than offset by the growth of our UKI
and other International businesses. We believe that our strategy
and competitive advantages position us well to continue to grow the
business through both organic and inorganic
opportunities."
FY
23 Operating Review:
US:
FanDuel had another excellent
year as we consolidated our
position as America's number one online
sportsbook, with NGR market share of 53.4% (GGR share 43.2%) for Q4
20235, while our
iGaming strategy is delivering substantial market
share gains, achieving 25.7% share in Q4 2023. As of the end of January 2024, FanDuel is the number one iGaming brand
based on GGR5.
FanDuel acquired over 3.7m new
sports betting and iGaming players in 2023, 19% more than the prior
year. The average projected payback period on investment to acquire
customers remains in line with recent years at less than 18
months4 giving
us the confidence to continue investing in further customer
acquisition. When combined with the strong contribution from our
existing player base, this will drive the long-term profitability of the
business.
FanDuel launched compelling new
product features during the recent NFL season which
increased player engagement. The Parlay
Hub drove over 1.5m pre-packaged Same Game Parlays ('SGP) on
Super Bowl 2024 alone. The
Pulse improved our live betting experience, and contributed
to a near three-fold year on year increase in the proportion of
live SGP bets during Super Bowl 2024.
In iGaming, we launched 82% more
gaming titles than the prior year, and also secured periods of
exclusive access to some of the sector's most famous games. We also
expanded our iGaming team,
agreed new partnerships and added new features to our product
proposition. Our iGaming strategy is
delivering strongly, and we believe we have now achieved product
parity with our closest competitors. With a strong pipeline of
further new products, including greater jackpot and multi-player
functionality expected to be provided by the acquisition of Beyond
Play we signed in February 2024, we are well-placed for further
market share gains.
Group Ex-US:
Performance in UKI was strong during 2023, taking share across both retail and online
channels, with our estimated 2023
online UK market share growing by 2 percentage
points to 30%6. Our continuous focus on
our product proposition saw us further enhance our higher-margin Bet
Builder and Build-A-Bet parlay products. We added exclusive new
betting markets, and launched well-received new products
like 'Acca Freeze' on Sky
Bet which drove increased penetration of these high-margin products
and benefitted our net revenue margin. We
also rolled out new iGaming features with improved cross-sell
journeys for sportsbook customers to iGaming products
and expanded content,
particularly for Live casino. These changes drove iGaming AMP growth of 11.8% and
record multi-product player rates with Paddy Power
reaching 53% of sports customers playing iGaming in Q4.
In Australia, Sportsbet grew AMPs by 1.9%
to 1.1 million, driven by high levels of retention. Average spend
per player has however reduced back to pre-Covid levels. We have
also seen a softness in the racing market across the second half of
2023, which we expect to persist through 2024. We expect the
challenging market, along with increased regulatory and compliance
costs, to reduce Australian profitability further in 2024. However,
we believe Sportsbet's scale, 45% market share9, and
leadership in brand and product, position us well for the
future.
The effectiveness of our
International strategy to
buy and build
podium positions was evident from our strong 2023 performance with growth across both revenue
and AMPs. We continued to focus on targeted
investment and a "local hero" strategy in key "Consolidate and Invest" markets while
optimizing the PokerStars business which has a greater presence in
our "Optimize and
Maintain" geographies. In Italy,
Sisal is the #1 online brand across the
combined sports, iGaming and lottery
market9 and
helped deliver 10.3% pro forma revenue growth10. We grew market
share in Georgia and Armenia, continued to leverage key local
partnerships in Brazil where we also improved our customer
registration journey, delivered good growth in Spain with a refreshed product proposition, and drove strong
online adoption in Turkey. We believe we
are well-placed for continued expansion in India having
successfully maintained our high levels of customer engagement
following the change in tax regime in Q4. The acquisition of Maxbet
was completed in January 2024 and the plans to integrate the
business are progressing well.
FY
2023 financial highlights: Group
|
In
$ millions
|
Revenue
|
Adjusted
EBITDA
|
Further Adjusted
EBITDA
|
|
2023
|
2022
|
YOY
|
YOY
CC
|
2023
|
2022
|
YOY
|
YOY
CC
|
2023
|
2022
|
YOY
|
YOY
CC
|
|
|
|
|
|
|
|
|
|
|
|
|
|
US
|
4,484
|
3,187
|
40.7%
|
40.6%
|
65
|
(347)
|
|
|
167
|
(263)
|
|
|
UKI
|
3,047
|
2,664
|
14.4%
|
13.7%
|
888
|
757
|
17.2%
|
16.0%
|
911
|
777
|
17.3%
|
16.0%
|
Australia
|
1,447
|
1,558
|
(7.1%)
|
(2.8%)
|
348
|
477
|
(27.0%)
|
(23.1%)
|
356
|
485
|
(26.7%)
|
(22.8%)
|
International
|
2,812
|
2,055
|
36.8%
|
34.2%
|
592
|
395
|
49.8%
|
41.5%
|
627
|
417
|
50.4%
|
42.7%
|
Unallocated corporate
overhead11
|
|
|
|
|
(215)
|
(141)
|
52.7%
|
48.3%
|
(187)
|
(127)
|
47.2%
|
42.7%
|
Group Ex-US
|
7,306
|
6,277
|
16.4%
|
16.6%
|
1,613
|
1,489
|
8.4%
|
8.2%
|
1,707
|
1,552
|
10.0%
|
9.8%
|
Group
|
11,790
|
9,463
|
24.6%
|
24.7%
|
1,678
|
1,142
|
46.9%
|
46.6%
|
1,874
|
1,289
|
45.4%
|
45.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Group delivered strong
revenue growth for 2023
up 24.6% year on year to
$11,790m. We continued to expand our
recreational customer base across
all segments, with
AMPs up 20.3% year on year to 12.3m. FanDuel was a key driver of this
growth, with revenue in our US
business up 40.7% despite customer friendly
sports results. The impact of sports results is calculated as the
difference between our expected net revenue margin and actual net
revenue margin and had an approximately 7.8 percentage point
negative impact on US revenue growth.
Group Ex-US revenue growth of 16.4% was
driven by a strong performance in UKI and in our "Consolidate and Invest"7
International markets. We also benefited from the full year consolidation of the
Sisal business acquired during 2022, which generated
$1,218m in revenue
compared with $465m in 2022. This was partly offset by
the impact of softer
racing market conditions in Australia combined with a reduced level
of Australian player engagement compared
with the prior year, following easing of
COVID-19 restrictions. On a pro forma
basis, revenue growth for the Group-Ex US was 6.3%10.
The Group
reported a net loss for 2023
of $1,211m after recording
a number of non-cash expenses including (i) a loss of $725m relating to an
impairment of trademarks
associated with the PokerStars business reflecting "local
hero" strategy and PokerStars' presence in predominantly lower
growth "Optimize and Maintain" markets; (ii) a loss
of $165 million relating to
a change in the fair value
of the Fox Option liability (2022: $83m gain); and
(iii) amortization of acquired intangibles
charge of $791 million (2022: $655m). The increases in the net
loss, the net loss margin and the net loss per share during 2023
compared with 2022, were all primarily due to the PokerStars
impairment loss and the change in the fair value of the Fox Option
liability.
The Group delivered
Further Adjusted EBITDA2 growth
of 45.4% to
$1,874m.
This growth reflects the strong performance
described above and an expansion in Further Adjusted EBITDA
Margin2 of 230
basis points. This margin growth was
primarily driven by the inflection of our
US division to positive Adjusted EBITDA, partially offset by (i) the impact of the annualization of
2022 point of consumption tax rate increases in Australia; and (ii)
an increase in unallocated corporate overhead (excl. Share
compensation expense) of 47.2% to $187m. This reflected greater
investment in Group resource and Flutter Edge capabilities, due to
the rapid growth of the business in recent years, as well as new
compliance requirements as a U.S. listed
company11.
Loss per share increased to $(6.89)
per share due to the increase in net loss discussed above. Adjusted
Earnings Per Share4 grew 25.8%
to $3.51 year on year reflecting the Further Adjusted
EBITDA2 growth as detailed above which was partially
offset by (i) an increase in Interest expense, net, when compared
with 2022 as a result of the full year impact from the increased
borrowings to fund the Sisal acquisition, as well as a higher cost
of debt during 2023, (ii) the change in the Fox Option liability
from a gain of $83m in 2022 to a loss in 2023 of $165m; and (iii)
an increase in Adjusted Income tax expense primarily due to
geographic profit mix changes.
The Group net cashflow provided by
operating activities in 2023 decreased 19.4% compared with 2022
reflecting a decrease in player liabilities following the record
lottery jackpot win in Sisal in February 2023. Adjusted Free
Cash Flow2 growth of 62.8% was primarily driven by the inflection of our US
business.
Total debt increased from $6,750m to
$7,056m while net debt2 increased from
$5,674m at December 31, 2022 to $5,795m at December 31, 2023.
Further Adjusted EBITDA2
growth reduced the Group's leverage
ratio2 to 3.1x
from 4.4x at the end of December, 31 2022 bringing the Group closer to the now updated medium term
target of 2.0-2.5x.
FY
2023 financial highlights: Segments
US revenue increased 40.7% year
on year with strong growth in sportsbook and iGaming of 45.9% and
47.2% respectively. Sportsbook revenue benefitted from expansion
into three additional sportsbook states, a full year's contribution
from 2022 new state openings
and 24.8% growth in pre-2022 states. iGaming
revenue growth was driven by strong
player volumes with iGaming AMPs 41.8% higher than
2022. Adjusted EBITDA2
and Further Adjusted EBITDA2 grew $412m and
$430m respectively due to the top line growth, combined with
operating leverage efficiencies in sales and marketing and general
and administrative expenses.
UKI strong revenue growth of 14.4% (13.7% on a constant currency
basis) was driven by a continued
expansion of our recreational customer base
as we grew our AMPs
by 5.4%, while delivering more efficient generosity
to our customers. This
resulted in sportsbook revenue growth of 10.5% and iGaming revenue up
18.1%. Adjusted EBITDA2 and Further
Adjusted EBITDA2
growth of 17.2% and 17.3% respectively, reflected
the revenue performance coupled with continued focus on driving
marketing efficiencies which delivered an increase in both
Adjusted EBITDA Margin2 and Further Adjusted EBITDA2 Margin of 70 basis
points.
Australia revenue was 7.1%
lower year on year or 2.8% lower on a constant currency
basis2. This was due to a softer
racing market environment during 2023 when compared to 2022, which
also benefited from higher levels of customer engagement following
Covid related restrictions. The reduction year on year in
Adjusted EBITDA2
and Further Adjusted EBITDA2 of 27.0% and 26.7%
respectively, reflected this, as well as the annualization of 2022
point of consumption tax rate increases which drove a decline in
Adjusted EBITDA Margin2 and Further Adjusted EBITDA Margin2 of
650 and 660 basis points,
respectively.
International grew AMPs
by 31.0% and revenue by
36.8%, or 34.2% on a constant currency2 basis
while Sisal generated
$1,218m in revenue during 2023 compared
with $465m in 2022 post acquisition. On a pro forma basis,
International revenue grew 6.0%
with "Consolidate and Invest" markets up
13.7% year on year10. This included Italy +10.0%,
Georgia & Armenia +17.0%, Turkey +36.2% (despite a material
foreign currency headwind), India +24.0%, Spain +15.5% and Brazil
+6.5%. Adjusted EBITDA2
and Further Adjusted EBITDA2 were 49.8% and
50.4% higher year on year, respectively (41.5% and 42.7% on a
constant currency basis, respectively), reflecting the top line
growth above. In addition,
optimization of sales and marketing expenses led
to a year on year reduction of 570 basis points as a percentage of
revenue. This contributed to an expansion in Adjusted and Further
Adjusted EBITDA Margin of 180 and 200 basis points,
respectively.
Q1
2024 to date trading update
January 1 to
March 17, 2024 compared with January 1 to
March 17, 202312
|
|
Period on period growth
rates
|
|
Sportsbook net revenue
margin
|
Sportsbook net revenue
margin
|
Sportsbook
revenue
|
iGaming
revenue
|
Other
revenue
|
Total
revenue
|
US
|
8.5%
|
+230bps
|
63.7%
|
50.3%
|
(6.5%)
|
55.6%
|
UKI
|
11.9%
|
+30bps
|
9.6%
|
27.7%
|
4.9%
|
17.3%
|
Australia
|
12.8%
|
+160bps
|
(8.8%)
|
|
|
(8.8%)
|
International
|
9.8%
|
(420bps)
|
(13.0%)
|
7.5%
|
20.9%
|
3.0%
|
Group ex-US
|
11.8%
|
(20bps)
|
(2.2%)
|
14.8%
|
11.3%
|
6.3%
|
Group
|
9.7%
|
+110bps
|
26.0%
|
22.2%
|
2.3%
|
23.4%
|
The Q1 trading update is based on how segments will be
reported in 2024. PokerStars US will be reported in the
International segment, having been included in the US segment for
2023, in line with how the business is now managed. In the above
table, 2023 comparative numbers are on a 2024 comparable
basis.
US: trading has been strong with total revenue growth of 55.6%:
· Strong
sportsbook revenue growth of 63.7% driven by sportsbook staking
+19.6%, combined with a 230bps sportsbook net revenue margin
improvement. The higher sportsbook net revenue margin is driven by
ongoing structural margin improvements and significant prior year
promotional spend on customer acquisition on launches in Ohio
(January 1, 2023) and Massachusetts (March, 10 2023). This was
partly offset by an unfavorable year on year sports results impact.
The current year period includes seven days of North Carolina
trading following launch on March 10, 2024.
· iGaming revenue growth of 50.3%, benefitting from our larger
player base and continued product improvements.
· Excluding revenue from new state launches in both periods,
total revenue increased by 34.1%.
UKI: revenue +17.3% with
improved product proposition driving momentum into 2024, most
notably in gaming +27.7%.
Australia: revenue reduced by
8.8% due to racing market softness continuing into 2024, partly
offset by favorable sports results
International: revenue
increased by 3.0%. The addition of MaxBet
was more than offset by customer friendly sports results in Italy
reducing sportsbook net revenue margin by 420bps. Sportsbook stakes
were 24.4% higher year on year, somewhat benefitting from the
recycling of players' winnings
FY
2024 outlook
|
FY 2023
|
2024
guidance13
|
|
|
Low
|
High
|
US revenue
|
$4.4bn
|
$5.8bn
|
$6.2bn
|
US Further Adjusted EBITDA
|
$232m
|
$635m
|
$785m
|
Group Ex-US revenue
|
$7.39bn
|
$7.65bn
|
$8.05bn
|
Group Ex-US Further
Adjusted EBITDA
|
$1.64bn
|
$1.63bn
|
$1.83bn
|
Australia Further Adjusted
EBITDA
|
$356m
|
Approximately $250m
|
Depreciation and amortization excl.
acquired intangibles
|
$464m
|
Approximately $510m
|
Interest expense, net
|
$385m
|
Approximately $370m
|
Capital
expenditure14
|
$602m
|
Approximately $670m
|
Cash transaction,
restructuring and integration costs
|
$220m15
|
Approximately $150m
|
The outlook above is based on how segments will be reported in
2024. PokerStars US will be reported in the International segment,
having been included in the US segment for 2023, in line with how
the business is now managed. In the above table, 2023 numbers are
shown on a 2024 comparable basis. 16
We are introducing 2024 guidance
with the following expectations:
· US:
Revenue and Further Adjusted EBITDA mid-points of
$6.0bn and $710m, representing year on year growth of 36.3% and
206.1% respectively. The phasing of revenue is expected to be
broadly in line with the prior year, allowing for the prior year
impact of sports results being favorable in Q2 and unfavorable in
Q4. We expect cost of sales as a percentage of net revenue to be
approximately 56.5% in 2024 and approximately 30.0% of Further
Adjusted EBITDA to be generated in H1, with Q2 being higher than Q1
due to the timing of new state openings.
· Group
ex-US: Revenue and Further Adjusted
EBITDA mid-points of $7.85bn and $1.73bn, representing year on year
growth of 6.3% and 5.4% respectively. This includes a Further
Adjusted EBITDA expectation of approximately $250m in
Australia, reflective of the current market softness and increased
taxes.
Guidance is provided (i) on the
basis that sports results are in line with our expected margin for
the remainder of the year, (ii) at current foreign exchange rates,
and (iii) on the basis of a consistent regulatory and tax
framework.
A reconciliation of our
forward-looking non-GAAP financial measures to the most directly
comparable GAAP financial measure cannot be provided without
unreasonable effort. This is due to the inherent difficulty of
accurately forecasting the occurrence and financial impact of the
adjusting items necessary for such a reconciliation to be prepared
of items that have not yet occurred, are out of our control, or
cannot be reasonably predicted.
Capital structure update
In August 2023, we outlined that we
would consider the appropriate level of leverage for the Group
given our plans to become US listed, as well as the positive cash
flows and future profitability profile expected for the Group.
Following extensive discussions with shareholders, the Board
has confirmed that our
medium-term target leverage ratio will increase to
2.0-2.5x
(from previously disclosed
1.0x-2.0x3). In line with our
approach in the past and given the expected improvement in Adjusted
EBITDA profile of the Group, the Board will also allow flexibility
for the leverage ratio to be higher than this range in support of
value-creating acquisition opportunities.
Listing update
We were pleased to announce on
January 29, 2024 that Flutter shares commenced trading on the NYSE under the
ticker symbol: "FLUT" (CUSIP No.: G3643J 108). Flutter shares
continue to trade on the London Stock Exchange ("LSE") under the
existing ticker symbol: "FLTR". We announced our proposal to move
our primary listing to the NYSE to the
market here.
We believe that
this will unlock long-term strategic and capital
market benefits. Plans are on track for this proposal to be put to
shareholders as a Special Resolution at the 2024 AGM on May 1,
2024. Subject to shareholder approval, the transition is expected
to become effective on May 31, 2024.
Conference call:
Flutter management will host a
conference call today at 10:30 a.m. GMT (6:30 a.m. ET) to review
the results and be available for questions, with access via webcast
and telephone.
A public audio webcast of
management's call and the related Q&A can be accessed by
registering here
or via www.flutter.com/investors.
For those unable to listen to the live broadcast, a replay will be
available approximately one hour after conclusion of the call. This
earnings release and supplementary materials will also be made
available via www.flutter.com/investors.
Analysts and investors who wish to
participate in the live conference call must do so by dialing any
of the numbers below and using conference ID 53722. Please dial in
10 minutes before the conference call begins.
+1 646 307 1963 (United
States)
+44 20 3481 4247 (United
Kingdom)
+353 1 582 2023 (Ireland)
+61 2 8088 0946
(Australia)
Forward-Looking Statements
This press release contains
information that is forward-looking, including within the meaning
of Section 27A of the Securities Act of 1933, as amended and
Section 21E of the Securities Exchange Act of 1934, as amended, and
which reflects the Company's current views with respect to, among
other things, its operations, its financial performance and its
industry. Forward-looking statements include all statements that
are not historical facts. In some cases, you can identify these
forward-looking statements by the use of words
such as "outlook", "believe(s)", "expect(s)", "potential",
"continue(s)", "may", "will", "should", "could", "would",
"seek(s)", "predict(s)", "intend(s)", "trends", "plan(s)",
"estimate(s)", "anticipates", "projection", "goal", "target",
"aspire", "will likely result", and or the negative version of
these words or other comparable words of a future or
forward-looking nature. Such forward-looking statements are subject
to various risks and uncertainties. Accordingly, there are or will
be important factors that could cause actual outcomes or results to
differ materially from those indicated in these statements. Such
factors include, among others, risks related to Flutter's business,
operations and financial performance, including its ability to
effectively compete in the global entertainment and gaming
industries, its ability to retain existing customers and to
successfully acquire new customers, its ability to develop new
product offerings, its ability to successfully acquire and
integrate new businesses, its ability to maintain relationships
with third-parties, its ability to maintain its reputation, and
public sentiment towards online betting and iGaming generally;
market and global conditions and economic factors beyond Flutter's
control, such as the potential impact of general economic
conditions, including inflation, rising interest rates and
instability in the banking system, on Flutter's liquidity,
operations and personnel; risks related to licensing and
regulation, including Flutter's ability to obtain and maintain
licenses with gaming authorities, adverse changes to the regulation
of online betting and iGaming, the failure of additional
jurisdictions to legalize and regulate online betting and iGaming,
and Flutter's ability to comply with complex, varied and evolving
U.S. and international laws and regulations relating to its
business; Flutter's ability to raise financing in the future;
Flutter's success in retaining or recruiting officers, key
employees or directors; litigation and the ability to adequately
protect Flutter's intellectual property rights; the impact of data
security breaches or cyber-attacks on Flutter's systems; and
Flutter's ability to remediate material weaknesses in its internal
control over financial reporting.
Additional factors that could cause
the Company's results to differ materially from those described in
the forward-looking statements can be found under the section
entitled "Risk Factors" of the Company's Amendment No. 1 to the
Registration Statement on Form 20-F as filed with the Securities
and Exchange Commission ("SEC"), on January 18, 2024, as such
factors may be updated in the Company's Annual Report on Form
10-K for the year ended December 31, 2023 and other periodic filings with the SEC,
which are accessible on the SEC's website at
www.sec.gov. Accordingly, there are or
will be important factors that could cause actual outcomes or
results to differ materially from those indicated in these
statements. These factors should not be construed as exhaustive and
should be read in conjunction with the other cautionary statements
that are included in the Company's filings with the SEC. The
Company undertakes no obligation to publicly update or review any
forward-looking statement, whether as a result of new information,
future developments or otherwise, except as required by
law.
About Flutter Entertainment plc
Flutter is the world's leading
online sports betting and iGaming operator, with leading positions
in markets across the world, including the US. Our ambition is to
leverage our significant scale and our challenger mindset to change
our industry for the better. By Changing
the Game, we believe we can deliver long-term growth while
promoting a positive, sustainable future for all our stakeholders.
We are well-placed to do so through the distinctive, global
competitive advantages of the Flutter Edge, which gives our brands
access to group-wide benefits to stay ahead of the competition, as
well as our clear vision for sustainability through our Positive
Impact Plan.
Flutter operates a diverse portfolio
of leading online sports betting and iGaming brands including
FanDuel, Sky Betting & Gaming, Sportsbet, PokerStars, Paddy
Power, Sisal, Tombola, Betfair, MaxBet, Junglee Games and
Adjarabet. We are the industry leader with $11,790 million of
revenue globally for fiscal 2023, up 25% YoY, and $3,312 million of
revenue globally for the quarter ended December 31,
2023.
Contacts:
Investor Relations:
|
Media Relations:
|
|
|
Paul Tymms, Investor
Relations
|
Kate Delahunty, Corporate
Communications
|
|
Ciara O'Mullane, Investor
Relations
|
Rob Allen, Corporate
Communications
|
|
Liam Kealy, Investor
Relations
|
Rupert Gowrley, Corporate
Communications
|
|
Email: investorrelations@flutter.com
|
Email: corporatecomms@flutter.com
|
|
|
|
|
|
|
| |
Links:
Sign up to our RNS and SEC
alerts here
Sign up to our Press Releases
here
Follow Flutter Entertainment
on LinkedIn
or
X
Notes
1.
Average Monthly Players ("AMPs") is defined as the
average over the applicable reporting period of the total number of
players who have placed and/or wagered a stake and/or contributed
to rake or tournament fees during the month. This measure does not
include individuals who have only used new player or player
retention incentives, and this measure is for online players only
and excludes retail player activity. In circumstances where a
player uses multiple product categories within one brand, we are
generally able to identify that it is the same player who is using
multiple product categories and therefore count this player as only
one AMP at the Group level while also counting this player as one
AMP for each separate product category that the player is using. As
a result, the sum of the AMPs presented at the product category
level is greater than the total AMPs presented at the Group level.
See "-"Item 5. Operating and Financial Review and Prospects-Key
Operational Metrics" of the Company's Amendment No. 1 to the
Registration Statement on Form 20-F as filed with the Securities
and Exchange Commission ("SEC"), on January 18, 2024 for additional
information regarding how we calculate AMPs data, including a
discussion regarding duplication of players that exists in such
data.
2.
Adjusted EBITDA, Further
Adjusted EBITDA, Adjusted EBITDA Margin, Further
Adjusted EBITDA Margin,
Group Ex-US Adjusted EBITDA, Group Ex-US
Further Adjusted EBITDA, Segment Further Adjusted EBITDA, Segment
Further Adjusted EBITDA margin, Adjusted Free Cash Flows,
Net Debt, Leverage Ratio, Constant Currency,
Adjusted Net Profit
Attributable to Flutter Shareholders and
Adjusted Earnings Per Share are non-GAAP financial measures.
See "Definitions of non-GAAP financial measures"
and "Reconciliations of Non-GAAP Financial
Measures" sections of this document for definitions of
these measures and reconciliations to the
most directly comparable financial measures calculated in
accordance with GAAP. Due to rounding, these numbers may not add up
precisely to the totals provided.
3.
Leverage ratio target as
previously disclosed of 1-2x was calculated as IFRS Net Debt
divided by IFRS Adjusted EBITDA.
4.
Payback is calculated as the projected average
length of time it takes players to generate sufficient Adjusted
gross profit to repay the original average cost of acquiring those
players. Customer acquisition costs include the marketing and
associated promotional spend incurred to acquire a customer. The
projected Adjusted gross profit is based on predictive models
considering inputs such as staking behavior, interaction with
promotional offers and gross revenue margin. Projected Adjusted
gross profit includes associated variable costs of revenue as well
as retention generosity costs.
5.
Online sportsbook market share is the
gross gaming
revenue (GGR) and net gaming revenue
(NGR)
market share of our FanDuel brand for the three
months to December 31, 2023 in the states in which FanDuel was live
(excluding Tennessee as they no longer report this data), based on
published gaming regulator reports in those states. iGaming market
share is the GGR, market share of FanDuel and PokerStars US
for the three months to
December 31, 2023 in the states in which those brands were live,
based on published gaming regulator reports in those states. Number
one iGaming brand is based on GGR for January 2024 in published
gaming regulator reports and external estimates by Eilers and
Krejcik for competitor market share.
6.
Estimated UKI GGR market
share of UK and Ireland for 2023.
7.
Consolidate and Invest markets within our
International segment are Italy, Spain, Georgia, Armenia, Brazil,
India, Turkey and Virtual Reality.
8.
IFRS Adjusted EBITDA Guidance of approximately
£1,440m was issued November 9, 2023 for the Group Ex-US. See
Reconciliations of non-GAAP financial measures for a breakdown of
Adjusted EBITDA performance on an IFRS basis by segment.
9.
Estimated Australia market share GGR sportsbook
share of Australian market for 2023.
10. References to pro forma, refer to performance as if
Sisal had been acquired as of January
1, 2022. The proforma financial information
is for informative purpose only and is not indicative of the
results of operations that would have been achieved if the Sisal
acquisition has taken place as of January 1,
2022.
11. Unallocated corporate overhead includes shared technology,
research and development, sales and marketing, and general and
administrative expenses that are not allocated to specific
segments.
12. The net revenue margin and revenue information presented
for the period from January 1 to March 17, 2024 as compared to the
period from January 1 to March 17, 2023 should not be taken as an
indication of expected results for the three months ended March 31,
2024, which may differ materially.
13. Foreign exchange rates at March 20, 2024 assumed in our 2024
guidance were USD:GBP of 0.790, USD:EUR of 0.920 and USD:AUD of
1.530.
14. Capital expenditure is defined payments for the purchase of
property and equipment, the purchase of intangible assets and
capitalized software.
15. The cash impact of transaction fees and restructuring and
integration costs, represents costs associated with (i) transaction
fees related to the listing of Flutter's ordinary shares in the
U.S. and proposed primary listing move, (ii) advisory fees in
connection with acquisitions, and (iii) costs arising from
strategic initiatives to integrate acquisitions within the
Group.
16. See "PokerStars US 2024 Reporting
reconciliation" section below for a reconciliation of US revenue,
US Further Adjusted EBITDA, Group Ex-US revenue and Group Ex-US
Further Adjusted EBITDA as reported in 2023 with PokerStars US
within the US segment to the 2024 reporting basis with PokerStars
US within the International segment which will be reflected in Q1
reporting.
Definitions of non-GAAP financial measures
This press release includes Adjusted
EBITDA, Further Adjusted EBITDA, Adjusted EBITDA Margin, Further
Adjusted EBITDA Margin, Group Ex-US Adjusted EBITDA, Group Ex-US
Further Adjusted EBITDA, Adjusted Net Profit Attributable to
Flutter Shareholders, Adjusted Earnings Per Share ("Adjusted EPS"),
Segment Further Adjusted EBITDA, leverage ratio, Net Debt, Adjusted
Free Cash Flow, constant currency and IFRS Adjusted EBITDA which
are non-GAAP financial measures that we use to supplement our
results presented in accordance with U.S. generally accepted
accounting principles ("GAAP"). These non-GAAP measures are
presented solely as supplemental disclosures to reported GAAP
measures because we believe that these non-GAAP measures are useful
in evaluating our operating performance, similar to measures
reported by its publicly-listed U.S. competitors, and regularly
used by analysts, lenders, financial institutional and investors as
measures of performance. Adjusted EBITDA, Further Adjusted EBITDA,
Adjusted EBITDA Margin, Further Adjusted EBITDA Margin, Adjusted
Net Profit Attributable to Flutter Shareholders, Adjusted EPS,
Segment Further Adjusted EBITDA, leverage ratio, Net Debt and
Adjusted Free Cash Flow, are not intended to be substitutes for any
GAAP financial measures, and, as calculated, may not be comparable
to other similarly titled measures of performance of other
companies in other industries or within the same
industry.
Constant currency reflects certain operating results on
a constant-currency basis in order to facilitate period-to-period
comparisons of our results without regard to the impact of
fluctuating foreign currency exchange rates. The term foreign
currency exchange rates refer to the exchange rates used to
translate our operating results for all countries where the
functional currency is not the U.S. Dollar, into U.S. Dollars.
Because we are a global company, foreign currency exchange rates
used for translation may have a significant effect on our reported
results. In general, our financial results are affected positively
by a weaker U.S. Dollar and are affected negatively by a stronger
U.S. Dollar. References to operating results on a constant-currency
basis mean operating results without the impact of foreign currency
exchange rate fluctuations. We believe the disclosure of
constant-currency results is helpful to investors because it
facilitates period-to-period comparisons of our results by
increasing the transparency of our underlying performance by
excluding the impact of fluctuating foreign currency exchange
rates. We calculate constant currency revenue, Further Adjusted
EBITDA and Segment Further Adjusted EBITDA by translating
prior-period revenue, Further Adjusted EBITDA and Segment Further
Adjusted EBITDA, as applicable, using the average exchange rates
from the current period rather than the actual average exchange
rates in effect in the prior period.
Adjusted EBITDA is defined on a
Group basis as net profit/(loss) before income taxes; other
(expense)/income, net; interest expense, net; depreciation and
amortization; transaction fees and associated costs; restructuring
and integration costs; legal settlements (loss contingencies), and
impairment of PPE and intangible assets.
Further Adjusted EBITDA is
defined as Adjusted EBITDA excluding share-based compensation.
Adjusted EBITDA Margin and Further Adjusted EBITDA
Margin is Adjusted EBITDA and
Further Adjusted EBITDA as a percentage of revenue,
respectively.
Segment Further Adjusted EBITDA is defined as segment Adjusted EBITDA which is our segment
measure of profit or loss excluding share-based compensation.
Segment Further Adjusted EBITDA Margin is segment Adjusted Further
Adjusted EBITDA as a percentage of revenue. From January 1, 2024,
Adjusted EBITDA will exclude the cost of share-based compensation.
We believe that this presentation is common practice in our
industry and improves comparability of our results with those of
our peers.
Group Ex-US Adjusted EBITDA is
defined as Group Adjusted EBITDA excluding our US Segment Adjusted
EBITDA.
Group Ex-US Further Adjusted EBITDA is defined as Group Ex-US Adjusted EBITDA excluding
share-based compensation.
Adjusted Net Profit Attributable to Flutter
Shareholders is defined as net
profit/(loss) as adjusted for after-tax effects of transaction fees
and associated costs; restructuring and integration costs; legal
settlements (loss contingencies), gaming taxes dispute,
amortization of acquired intangibles, accelerated amortization,
loss/(gain) on settlement of long-term debt, impairment of PPE and
intangible assets, financing related fees not eligible for
capitalization, gain from disposal of businesses and share-based
compensation.
Adjusted EPS is calculated by
dividing adjusted net income attributable to Flutter shareholders
by the number of diluted weighted-average ordinary shares
outstanding in the period.
Adjusted EBITDA, Further Adjusted
EBITDA, Adjusted EBITDA Margin, Further Adjusted EBITDA Margin,
Segment Further Adjusted EBITDA, Group Ex-US Adjusted EBITDA, Group
Ex-US Further Adjusted EBITDA, Adjusted net profit attributable to
Flutter shareholders and Adjusted EPS are non-GAAP measures and
should not be viewed as measures of overall operating performance,
indicators of our performance, considered in isolation, or
construed as alternatives to operating profit/(loss), net
profit/(loss) measures or earnings per share, or as alternatives to
cash flows from operating activities, as measures of liquidity, or
as alternatives to any other measure determined in accordance with
GAAP.
IFRS Adjusted EBITDA is defined
on a Group basis as net profit/(loss) before income taxes;
financial income; financial expense; depreciation and amortization;
transaction fees and associated costs; restructuring and
integration costs and impairment of PPE and intangible
assets.
Management has historically used
these measures when evaluating operating performance because we
believe that they provide additional perspective on the financial
performance of our core business.
Adjusted EBITDA and Further Adjusted
EBITDA has further limitations as an analytical tool. Some of these
limitations are:
· they
do not reflect the Group's cash expenditures or future requirements
for capital expenditure or contractual commitments;
· they
do not reflect changes in, or cash requirements for, the Group's
working capital needs;
· they
do not reflect interest expense, or the cash requirements necessary
to service interest or principal payments, on the Group's
debt;
· although depreciation and amortization
are non-cash charges, the assets being depreciated and
amortized will often have to be replaced in the future, and
Adjusted EBITDA and Further Adjusted EBITDA do not reflect any cash
requirements for such replacements;
· they
are not adjusted for all non-cash income or expense items
that are reflected in the Group's statements of cash flows;
and
· the
further adjustments made in calculating Adjusted EBITDA and Further
Adjusted EBITDA are those that management consider not to be
representative of the underlying operations of the Group and
therefore are subjective in nature.
Net
debt is defined as total debt,
excluding premiums, discounts, and deferred financing expense, and
the effect of foreign exchange that is economically hedged as a
result of our cross-currency interest rate swaps reflecting the net
cash outflow on maturity less cash and cash equivalents.
Leverage ratio is defined as
net debt divided by Further Adjusted EBITDA. We use this non-GAAP
financial measure to evaluate our financial leverage. We present
net debt to Further Adjusted EBITDA because we believe it is more
representative of our financial position as it is reflective of our
ability to cover our net debt obligations with results from our
core operations, and is an indicator of our ability to obtain
additional capital resources for our future cash needs. We believe
net debt is a meaningful financial measure that may assist
investors in understanding our financial condition and recognizing
underlying trends in our capital structure. The Leverage Ratio is
not substitute for, and should be used in conjunction with, GAAP
financial ratios. Other companies may calculate leverage ratios
differently.
Adjusted Free Cash Flow is
defined as net cash provided by operating activities excluding
changes in operating assets and liabilities related to player
deposits, investment and player deposit liabilities, cash paid for
transaction fees and associated cost, restructuring fees and
integration cost less payments for property and equipment,
intangible assets and capitalized software. We believe that
excluding these items from adjusted free cash flow better portrays
our ability to generate cash, as such items are not indicative of
our operating performance for the period. This non-GAAP measure may
be useful to investors and other users of our financial statements
as a supplemental measure of our cash performance, but should not
be considered in isolation, as a measure of residual cash flow
available for discretionary purposes, or as an alternative to
operating cash flows presented in accordance with GAAP. Adjusted
Free Cash Flow does not necessarily represent funds available for
discretionary use and is not necessarily a measure of our ability
to fund our cash needs. Our calculation of Adjusted Free Cash Flow
may differ from similarly titled measures used by other companies,
limiting their usefulness as a comparative measure.
Consolidated Balance Sheets:
($
in millions except share and per share amounts)
|
As of December
31,
|
|
2023
|
|
2022
|
Assets
|
|
|
|
Current assets:
|
|
|
|
Cash and cash equivalents
|
$1,497
|
|
$966
|
Cash and cash equivalents -
restricted
|
22
|
|
16
|
Player deposits - cash and cash
equivalents
|
1,752
|
|
2,008
|
Player deposits -
investments
|
172
|
|
167
|
Accounts receivable, net
|
90
|
|
116
|
Prepaid expenses and other current
assets
|
443
|
|
703
|
Total current assets
|
3,976
|
|
3,976
|
Investments
|
9
|
|
11
|
Property and equipment,
net
|
471
|
|
430
|
Operating lease right-of-use
assets
|
429
|
|
452
|
Intangible assets, net
|
5,881
|
|
7,036
|
Goodwill
|
13,745
|
|
13,244
|
Deferred tax assets
|
24
|
|
47
|
Other non-current assets
|
100
|
|
62
|
Total assets
|
$24,635
|
|
$25,258
|
Liabilities, redeemable non-controlling interests and
shareholders' equity
|
|
|
|
Current liabilities:
|
|
|
|
Accounts payable
|
$
240
|
|
$
248
|
Player deposit liability
|
1,786
|
|
2,110
|
Operating lease
liabilities
|
123
|
|
110
|
Long-term debt due within one
year
|
51
|
|
43
|
Other current liabilities
|
2,326
|
|
2,115
|
Total current liabilities:
|
4,526
|
|
4,626
|
Operating lease liabilities -
non-current
|
354
|
|
384
|
Long-term debt
|
7,005
|
|
6,707
|
Deferred tax liabilities
|
802
|
|
919
|
Other non-current
liabilities
|
580
|
|
502
|
Total liabilities
|
13,267
|
|
13,138
|
Redeemable non-controlling interests
|
1,152
|
|
929
|
Shareholders' equity
|
|
|
|
Common share (Authorized 300,000,000
shares of €0.09 ($0.10) par value each; issued 2023: 177,008,649
shares; 2022: 176,091,902 shares)
|
36
|
|
36
|
Shares held by employee benefit
trust, at cost 2023: nil, 2022: 1,396 shares
|
-
|
|
(1)
|
Additional paid-in
capital
|
1,385
|
|
1,192
|
Accumulated other comprehensive
loss
|
(1,483)
|
|
(1,782)
|
Retained earnings
|
10,106
|
|
11,590
|
Total Flutter shareholders' equity
|
10,044
|
|
11,035
|
Non-controlling interests
|
172
|
|
156
|
Total shareholders' equity
|
10,216
|
|
11,191
|
Total liabilities, redeemable non-controlling interests and
shareholders' equity
|
$24,635
|
|
$25,258
|
Consolidated Statement of Comprehensive
Income/(Loss):
($
in millions except per share and per share
amounts)
|
Year ended December
31
|
|
2023
|
|
2022
|
|
2021
|
Revenue
|
$11,790
|
|
$9,463
|
|
$8,308
|
Cost of Sales
|
(6,202)
|
|
(4,813)
|
|
(3,881)
|
Gross profit
|
5,588
|
|
4,650
|
|
4,427
|
Technology, research and development
expenses
|
(765)
|
|
(552)
|
|
(634)
|
Sales and marketing
expenses
|
(3,776)
|
|
(3,014)
|
|
(2,819)
|
General and administrative
expenses
|
(1,596)
|
|
(1,172)
|
|
(1,423)
|
Operating loss
|
(549)
|
|
(88)
|
|
(449)
|
Other (expense) income,
net
|
(157)
|
|
5
|
|
101
|
Interest expense, net
|
(385)
|
|
(212)
|
|
(215)
|
Loss before income taxes
|
(1,091)
|
|
(295)
|
|
(563)
|
Income tax expense
|
(120)
|
|
(75)
|
|
(194)
|
Net
loss
|
(1,211)
|
|
(370)
|
|
(757)
|
Net gain/(loss) attributable to
non-controlling interests and redeemable non-controlling
interests
|
13
|
|
(1)
|
|
(13)
|
Adjustment of redeemable
non-controlling interest to redemption value
|
(2)
|
|
63
|
|
179
|
Net loss attributable to Flutter
shareholders
|
(1,222)
|
|
(432)
|
|
(923)
|
Net
loss per share
|
|
|
|
|
|
Basic
|
(6.89)
|
|
(2.44)
|
|
(5.24)
|
Diluted
|
(6.89)
|
|
(2.44)
|
|
(5.24)
|
Other comprehensive income / (loss), before
tax:
|
|
|
|
|
|
Effective portion of changes in fair
value of cash flow hedges
|
(121)
|
|
80
|
|
26
|
Fair value of cash flow hedges
transferred to the income statement
|
93
|
|
(72)
|
|
(11)
|
Foreign exchange (loss) / gain on
net investment hedges
|
30
|
|
(145)
|
|
30
|
Foreign exchange gain / (loss) on
translation of the net assets of foreign currency denominated
entities
|
357
|
|
(896)
|
|
(673)
|
Fair value movements on available
for sale debt instruments
|
5
|
|
(4)
|
|
(1)
|
Other comprehensive income / (loss)
|
364
|
|
(1,037)
|
|
(629)
|
Other comprehensive income / (loss)
attributable to Flutter shareholders
|
299
|
|
(926)
|
|
(627)
|
Other comprehensive income / (loss)
attributable to non-controlling interest and redeemable
non-controlling interest
|
65
|
|
(111)
|
|
(2)
|
Total comprehensive income / (loss) for the
year
|
$(847)
|
|
$(1,407)
|
|
$(1,386)
|
Consolidated Statement of Cash
Flows
($
in millions)
|
Year ended December
31,
|
Cash flows from operating activities
|
2023
|
|
2022
|
|
2021
|
Net loss
|
$(1,211)
|
|
$(370)
|
|
$(757)
|
Adjustments to reconcile net loss to
net cash from operating activities:
|
|
|
|
|
|
Depreciation and
amortization
|
1,285
|
|
1,075
|
|
1,010
|
Impairment Loss
|
725
|
|
-
|
|
-
|
Change in fair value of
derivatives
|
(7)
|
|
(152)
|
|
(141)
|
Non-cash interest (income) /
expense, net
|
(12)
|
|
7
|
|
17
|
Non-cash operating lease
expense
|
117
|
|
96
|
|
70
|
Unrealized foreign currency exchange
(gain) / loss, net
|
(225)
|
|
196
|
|
101
|
Loss / (gain) on disposal
|
5
|
|
-
|
|
(16)
|
Share-based compensation - equity
classified
|
180
|
|
132
|
|
63
|
Share-based compensation - liability
classified
|
10
|
|
49
|
|
425
|
Other (expense) / income,
net
|
163
|
|
(89)
|
|
69
|
Deferred taxes
|
(132)
|
|
(145)
|
|
(12)
|
Loss / (gain) on extinguishment of
long-term debt
|
6
|
|
65
|
|
(130)
|
Change in contingent
consideration
|
(2)
|
|
(6)
|
|
7
|
Change in operating assets and
liabilities:
|
|
|
|
|
|
Player deposits
|
(1)
|
|
(72)
|
|
-
|
Accounts receivable
|
23
|
|
(12)
|
|
(17)
|
Prepaid expenses and other current
assets
|
146
|
|
(97)
|
|
(41)
|
Accounts payable
|
(4)
|
|
(24)
|
|
(1)
|
Other current liabilities
|
366
|
|
207
|
|
(117)
|
Player deposit liability
|
(382)
|
|
376
|
|
80
|
Operating leases
liabilities
|
(113)
|
|
(73)
|
|
(57)
|
Net
cash provided by operating activities
|
937
|
|
1,163
|
|
553
|
Cash flows from investing activities
|
|
|
|
|
|
Purchases of property and
equipment
|
(159)
|
|
(122)
|
|
(122)
|
Purchases of intangible
assets.
|
(175)
|
|
(100)
|
|
(85)
|
Capitalized software
|
(268)
|
|
(207)
|
|
(152)
|
Acquisitions, net of cash
acquired
|
-
|
|
(2,095)
|
|
(70)
|
Proceeds from disposal of property
and equipment
|
-
|
|
7
|
|
175
|
Net
cash used in investing activities
|
(602)
|
|
(2,517)
|
|
(254)
|
Cash flows from financing activities
|
|
|
|
|
|
Proceeds from issue of common share
upon exercise of options
|
13
|
|
9
|
|
18
|
Proceeds from issuance of long-term
debt (net of transaction costs)
|
2,018
|
|
4,692
|
|
1,661
|
Repayment of long-term
debt
|
(1,837)
|
|
(2,646)
|
|
(1,033)
|
Acquisition of non-controlling
interests
|
(95)
|
|
(251)
|
|
-
|
Distributions to non-controlling
interests
|
-
|
|
(7)
|
|
(23)
|
Payment of contingent
consideration
|
-
|
|
(11)
|
|
(10)
|
Repurchase of common
share
|
(212)
|
|
(3)
|
|
(252)
|
Net
cash (used in)/provided by financing activities
|
(113)
|
|
1,783
|
|
361
|
Net
increase in cash, cash equivalents and restricted
cash
|
222
|
|
429
|
|
660
|
Cash, cash equivalents and restricted cash - beginning of
year
|
2,990
|
|
2,681
|
|
2,151
|
Effect of foreign exchange on cash, cash equivalents and
restricted cash
|
59
|
|
(120)
|
|
(130)
|
Cash, cash equivalents and restricted cash - end of
year
|
$3,271
|
|
$2,990
|
|
$2,681
|
Consolidated Statement of Cash
Flows (continued)
($
in millions)
|
Year ended December
31,
|
Cash, cash equivalents and restricted cash comprise
of:
|
2023
|
|
2022
|
|
2021
|
Cash and cash equivalents
|
$
1,497
|
|
$
966
|
|
$1,286
|
Cash and cash equivalents -
restricted
|
22
|
|
16
|
|
10
|
Player deposits - cash and cash
equivalents
|
1,752
|
|
2,008
|
|
1,385
|
Cash, cash equivalents and restricted cash - end of
year
|
$3,271
|
|
$ 2,990
|
|
$ 2,681
|
Supplemental disclosures of cash flow
information:
|
|
|
|
|
|
Interest paid
|
408
|
|
222
|
|
214
|
Income taxes paid
|
255
|
|
199
|
|
191
|
Non-cash investing and financing activities:
|
|
|
|
|
|
Purchase of intangible assets with
accrued expense
|
-
|
|
21
|
|
-
|
Operating lease right-of-use assets
obtained in exchange of operating lease liabilities
|
73
|
|
148
|
|
135
|
Adjustments to lease balances as a
result of remeasurement
|
22
|
|
18
|
|
20
|
Business acquisitions (including
contingent consideration)
|
-
|
|
-
|
|
24
|
Cancellation of Treasury
Shares
|
-
|
|
-
|
|
60
|
Reduction in capital
|
-
|
|
-
|
|
13,631
|
Proceeds from issuance as part of
debt restructuring
|
5,267
|
|
-
|
|
-
|
Principal amount of extinguishment
as part of debt restructuring
|
4,622
|
|
-
|
|
-
|
Reconciliations of non-GAAP financial
measures
Adjusted EBITDA reconciliation:
See below a reconciliation
of Adjusted
EBITDA, Adjusted EBITDA Margin, Further Adjusted EBITDA and Further
Adjusted EBITDA Margin to net loss, to the most comparable GAAP
measure.
($ in millions)
|
Year Ended December
31,
|
|
2023
|
|
2022
|
Net loss
|
$(1,211)
|
|
$(370)
|
Add back:
|
|
|
|
Income taxes
|
120
|
|
75
|
Other (expense)/income,
net
|
157
|
|
(5)
|
Interest expense, net
|
385
|
|
212
|
Depreciation and
amortization
|
1,285
|
|
1,076
|
Transaction fees and
associated costs(1)
|
92
|
|
43
|
Restructuring and integration
costs(2)
|
126
|
|
155
|
Legal settlements/(loss
contingencies)(3)
|
-
|
|
(44)
|
Impairment of PPE and Intangible
Assets(4)
|
725
|
|
-
|
Group Adjusted EBITDA
|
1,678
|
|
1,142
|
Less: US Adjusted
EBITDA
|
65
|
|
(347)
|
Group ex-US Adjusted EBITDA
|
1,613
|
|
1,489
|
Group Revenue
|
11,790
|
|
9,463
|
Group Adjusted EBITDA
Margin
|
14.2%
|
|
12.1%
|
Group Adjusted EBITDA
|
1,678
|
|
1,142
|
Add back:
|
|
|
|
Group share-based compensation
expense
|
196
|
|
147
|
Group Further Adjusted EBITDA
|
$1,874
|
|
$1,289
|
Further Adjusted EBITDA
Margin
|
15.9%
|
|
13.6%
|
1. Fees primarily associated with (i) transaction fees related to
the proposed listing of Flutter's ordinary shares in the U.S. of
$86 million for the year ended December 31, 2023 and (ii) Fox
Option arbitration proceedings of $30 million and
acquisition-related costs in connection with tombola and Sisal of
$11 million for the year ended December 31, 2022.
2. During the year ended December 31, 2023 costs of $126 million
(year ended December 31, 2022: $155 million) primarily relate to
various restructuring and other strategic initiatives to drive
increased synergies arising primarily from the acquisitions of TSG
and Sisal. These actions include efforts to consolidate and
integrate our technology infrastructure, back-office functions and
relocate certain operations to lower cost locations. The costs
primarily include severance expenses, advisory fees and temporary
staffing cost. Costs also include implementation costs of an
enterprise resource planning system that could not be
capitalized.
3. During the year ended December 31, 2022, the settlement of two
separate legacy The Stars Group ("TSG") litigation matters resulted
in the release of various legal provisions and an Income Statement
credit of $44 million.
4. In the fourth quarter of 2023, the Group recognized an
intangible asset impairment loss of $725 million in sales and
marketing expenses related to PokerStars trademark within the
International segment. The impairment was primarily driven by an
assessment of strategy and operational model aimed at maximizing
the value of PokerStars' proprietary poker assets consistent with
our International segment strategy to combine global scale with
local presence.
Further Adjusted EBITDA reconciliation, Segment and
Group Ex-US:
See below a reconciliation
of Group Ex-US
and segment Adjusted EBITDA, Adjusted EBITDA Margin, Further
Adjusted EBITDA and Further Adjusted EBITDA Margin to net loss, the
most comparable GAAP measure.
Group Ex-US
|
|
($ in millions)
|
Year Ended December
31,
|
|
2023
|
|
2022
|
Group Ex-US Adjusted EBITDA
|
$1,613
|
|
$1,489
|
Add back:
|
|
|
|
Share-based compensation
expense
|
94
|
|
63
|
Group Ex-US Further Adjusted EBITDA
|
$1,707
|
|
$1,552
|
Revenue
|
7,306
|
|
6,277
|
Adjusted EBITDA
Margin
|
22.1%
|
|
23.7%
|
Further Adjusted EBITDA
Margin
|
23.4%
|
|
24.7%
|
US
|
|
($ in millions)
|
Year Ended December
31,
|
|
2023
|
|
2022
|
US
Adjusted EBITDA
|
$65
|
|
$ (347)
|
Add back:
|
|
|
|
Share-based compensation
expense
|
102
|
|
84
|
US
Further Adjusted EBITDA
|
$167
|
|
$ (263)
|
|
|
|
|
Revenue
|
4,484
|
|
3,187
|
Adjusted EBITDA
Margin
|
1.4%
|
|
(10.9%)
|
Further Adjusted EBITDA
Margin
|
3.7%
|
|
(8.2%)
|
UKI
|
|
($ in millions)
|
Year Ended December
31,
|
|
2023
|
|
2022
|
UKI
Adjusted EBITDA
|
$888
|
|
$757
|
Add back:
|
|
|
|
Share-based compensation
expense
|
23
|
|
19
|
UKI
Further Adjusted EBITDA
|
$911
|
|
$777
|
|
|
|
|
Revenue
|
3,047
|
|
2,664
|
Adjusted EBITDA
Margin
|
29.1%
|
|
28.4%
|
Further Adjusted EBITDA
Margin
|
29.9%
|
|
29.1%
|
Australia
|
|
($ in millions)
|
Year Ended December
31,
|
|
2023
|
|
2022
|
Australia Adjusted EBITDA
|
$348
|
|
$477
|
Add back:
|
|
|
|
Share-based compensation
expense
|
8
|
|
8
|
Australia Further Adjusted EBITDA
|
$356
|
|
$485
|
|
|
|
|
Revenue
|
1,447
|
|
1,558
|
Adjusted EBITDA
Margin
|
24.1%
|
|
30.6%
|
Further Adjusted EBITDA
Margin
|
24.6%
|
|
31.1%
|
International
|
|
($ in millions)
|
Year Ended December
31,
|
|
2023
|
|
2022
|
International Adjusted EBITDA
|
$592
|
|
$395
|
Add back:
|
|
|
|
Share-based compensation
expense
|
35
|
|
22
|
International Further Adjusted EBITDA
|
$627
|
|
$417
|
|
|
|
|
Revenue
|
2,812
|
|
2,055
|
Adjusted EBITDA
Margin
|
21.1%
|
|
19.2%
|
Further Adjusted EBITDA
Margin
|
22.3%
|
|
20.3%
|
Unallocated corporate overhead
|
|
($ in millions)
|
Year Ended December
31,
|
|
2023
|
|
2022
|
Unallocated corporate overhead
|
$ (215)
|
|
$ (141)
|
Less:
|
|
|
|
Share-based compensation
expense
|
28
|
|
14
|
Unallocated corporate overhead
|
$ (187)
|
|
$ (127)
|
|
|
|
|
PokerStars US 2024 reporting reconciliation
($ in millions)
|
FY 2023 as
reported
|
|
PokerStars
US
|
|
FY 2024 reporting
basis
|
US revenue
|
4,484
|
|
(80)
|
|
4,404
|
US Further Adjusted
EBITDA
|
167
|
|
65
|
|
232
|
Group Ex-Us
|
7,306
|
|
80
|
|
7,386
|
Group Ex-US Further Adjusted
EBITDA
|
1,707
|
|
(65)
|
|
1,642
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Adjusted Free Cash Flow reconciliation:
See below a reconciliation of Adjusted Free Cash Flow to
net cash generated in operating activities, the most comparable GAAP measure.
($ in millions)
|
As of December
31,
|
|
2023
|
|
2022
|
Net cash provided by operating
activities
|
$937
|
|
$1,163
|
Less:
|
|
|
|
Change in player deposits
|
1
|
|
72
|
Change in player deposit
liability
|
382
|
|
(376)
|
Add cash impact of:
|
|
|
|
Transaction fees and associated
costs
|
83
|
|
32
|
Restructuring and integration
costs
|
137
|
|
114
|
Less cash impact of:
|
|
|
|
Purchase of property and
equipment
|
(159)
|
|
(122)
|
Purchases of intangible
assets
|
(175)
|
|
(100)
|
Capitalized software
|
(268)
|
|
(207)
|
Adjusted Free Cash Flow
|
$938
|
|
$576
|
|
|
|
|
Net
debt reconciliation:
See below a reconciliation
of net debt to
long-term debt, the most comparable GAAP measure.
($ in millions)
|
As of December
31,
|
|
2023
|
|
2022
|
Long-term debt
|
$7,005
|
|
$6,707
|
Long-term debt due within one
year
|
51
|
|
43
|
Total Debt
|
7,056
|
|
6,750
|
Add:
|
|
|
|
Transactions costs, premiums or
discount included in the carrying value of debt
|
54
|
|
41
|
Less:
|
|
|
|
Unrealized foreign exchange on
translation of foreign currency debt1
|
182
|
|
(151)
|
Cash and cash equivalents
|
(1,497)
|
|
(966)
|
Net
debt
|
$5,795
|
|
$5,674
|
|
|
|
|
1. Representing the adjustment for foreign exchange that is
economically hedged as a result of our cross-currency interest rate
swaps to reflect the net cash outflow on maturity.
Adjusted net profit attributable to Flutter
shareholders:
See below a reconciliation
of Adjusted net
profit attributable to Flutter shareholders to net loss, the most comparable GAAP
measure.
($ in millions)
|
As of December
31,
|
|
2023
|
|
2022
|
Net loss
|
$(1,211)
|
|
$(370)
|
Add (Less):
|
|
|
|
Transaction fees and associated
costs
|
92
|
|
43
|
Restructuring and integration
costs
|
126
|
|
155
|
Legal settlements/loss
contingencies
|
-
|
|
(44)
|
Impairment of PPE and Intangible
Assets
|
725
|
|
-
|
Amortization of acquired
intangibles
|
791
|
|
749
|
Accelerated amortization
|
30
|
|
-
|
Loss on settlement of long-term
debt
|
6
|
|
65
|
Financing related fees not eligible
for capitalization
|
29
|
|
9
|
Share-based compensation
|
196
|
|
147
|
Tax impact of above
adjustments1
|
(150)
|
|
(199)
|
Adjusted net profit
|
$634
|
|
$556
|
Less:
|
|
|
|
Net loss attributable
to non-controlling interests and
redeemable non-controlling interests2
|
13
|
|
(1)
|
Adjustment of
redeemable non-controlling interest
|
(2)
|
|
63
|
Adjusted net profit
attributable to Flutter shareholders
|
$623
|
|
$494
|
Weighted average number of
shares
|
177
|
|
177
|
1. Tax rates used in calculated adjusted net profit attributable
to Flutter shareholders is the statutory tax rate applicable to the
geographies in which the adjustments were incurred.
2. Represents net loss attributed to the non-controlling interest
in Sisal and the redeemable non-controlling interest in FanDuel,
Junglee and Adjarabet (2022).
3. Represents the adjustment made to the carrying value of the
redeemable non-controlling interests in Junglee and Adjarabet
(2022) to account for the higher of (i) the initial carrying amount
adjusted for cumulative earnings allocations, or (ii) redemption
value at each reporting date through retained
earnings.
Adjusted Earnings Per Share reconciliation:
See below a reconciliation
of Adjusted
Earnings Per Share to net loss per share, the most comparable GAAP
measure.
($ in millions)
|
As of December
31,
|
|
2023
|
|
2022
|
Net loss per Flutter
shareholders
|
$(6.89)
|
|
$(2.44)
|
Add (Less):
|
|
|
|
Transaction fees and associated
costs
|
0.52
|
|
0.24
|
Restructuring and integration
costs
|
0.71
|
|
0.88
|
Legal settlements/loss
contingencies
|
-
|
|
(0.25)
|
Impairment of PPE and Intangible
Assets
|
4.09
|
|
-
|
Amortization of acquired
intangibles
|
4.46
|
|
4.24
|
Accelerated amortization
|
0.17
|
|
-
|
Loss on settlement of long-term
debt
|
0.03
|
|
0.37
|
Financing related fees not eligible
for capitalization
|
0.16
|
|
0.05
|
Share-based compensation
|
1.11
|
|
0.83
|
Tax impact of above
adjustments1
|
(0.85)
|
|
(1.12)
|
Adjusted earnings per share
|
$3.51
|
|
$2.79
|
|
|
|
|
IFRS Adjusted EBITDA reconciliation:
See below a reconciliation
of Adjusted
EBITDA, Adjusted EBITDA Margin, Further Adjusted EBITDA and Further
Adjusted EBITDA Margin to net loss, to the most comparable GAAP
measure.
(in millions)
|
Year Ended December
31,
|
|
2023
|
Net loss
|
$(981)
|
Add back:
|
|
Income taxes
|
(125)
|
Financial income
|
(45)
|
Financial expense
|
676
|
Depreciation and
amortization
|
1,448
|
Transaction fees and associated
costs1
|
92
|
Restructuring and integration
costs2
|
126
|
Impairment of PPE and Intangible
Assets3
|
708
|
IFRS Group Adjusted EBITDA
|
$1,899
|
|
|
IFRS Group Adjusted EBITDA
|
£1,525
|
IFRS US Adjusted EBITDA
|
£81
|
IFRS Group Adjusted EBITDA ex-US
|
£1,444
|
IFRS UKI Adjusted EBITDA
|
£758
|
IFRS Australia Adjusted
EBITDA
|
£288
|
IFRS International Adjusted
EBITDA
|
£555
|
IFRS Unallocated corporate
overhead
|
£(157)
|
|
|
1. Fees primarily associated with transaction fees related to the
proposed listing of Flutter's ordinary shares in the
U.S.
2. Primarily relate to various restructuring and other strategic
initiatives to drive increased synergies arising primarily from the
acquisition of Sisal. These actions include efforts to consolidate
and integrate our technology infrastructure, back-office functions
and relocate certain operations to lower cost locations. The costs
primarily include severance expenses, advisory fees and temporary
staffing cost. Costs also include implementation costs of an
enterprise resource planning system that could not be
capitalized.
3. In the fourth quarter of 2023, the Group recognized an
intangible asset impairment loss related to PokerStars trademark
within the International segment. The impairment was primarily
driven by an assessment of strategy and operational model aimed at
maximizing the value of PokerStars' proprietary poker assets
consistent with our International segment strategy to combine
global scale with local presence.
Constant currency ('CC') growth rate
reconciliation:
See below a reconciliation of constant currency growth rates
to nominal currency growth rates, the most comparable GAAP
measure.
($ in millions)
|
As of December
31,
|
unaudited
|
2023
|
2022
|
YOY
|
2022
|
2022
|
YOY
|
Revenue
|
|
|
|
FX impact
|
CC
|
CC
|
US
|
4,484
|
3,187
|
40.7%
|
3
|
3,190
|
40.6%
|
UKI
|
3,047
|
2,664
|
14.4%
|
16
|
2,680
|
13.7%
|
Australia
|
1,447
|
1,558
|
(7.1%)
|
(68)
|
1,490
|
(2.8%)
|
International
|
2,812
|
2,055
|
36.8%
|
40
|
2,095
|
34.2%
|
Group
|
11,790
|
9,463
|
24.6%
|
(8)
|
9,456
|
24.7%
|
Group Ex-US
|
7,306
|
6,277
|
16.4%
|
(11)
|
6,266
|
16.6%
|
Adjusted EBITDA
|
|
|
|
|
|
|
US
|
65
|
(347)
|
|
-
|
(347)
|
|
UKI
|
888
|
757
|
17.2%
|
8
|
765
|
16.0%
|
Australia
|
348
|
477
|
(27.0%)
|
(24)
|
453
|
(23.1%)
|
International
|
592
|
395
|
49.8%
|
23
|
418
|
41.5%
|
Unallocated corporate
overhead
|
(215)
|
(141)
|
52.7%
|
(4)
|
(145)
|
48.3%
|
Group
|
1,678
|
1,142
|
46.9%
|
3
|
1,144
|
46.6%
|
Group Ex-US
|
1,613
|
1,489
|
8.4%
|
3
|
1,492
|
8.2%
|
Further Adjusted EBITDA
|
|
|
|
|
|
|
US
|
167
|
(263)
|
|
1
|
(262)
|
|
UKI
|
911
|
777
|
17.3%
|
8
|
785
|
16.0%
|
Australia
|
356
|
485
|
(26.7%)
|
(24)
|
461
|
(22.8%)
|
International
|
627
|
417
|
50.4%
|
23
|
440
|
42.7%
|
Unallocated corporate
overhead
|
(187)
|
(127)
|
47.2%
|
(4)
|
(131)
|
42.7%
|
Group
|
1,874
|
1,289
|
45.4%
|
3
|
1,292
|
45.1%
|
Group Ex-US
|
1,707
|
1,552
|
10.0%
|
2
|
1,554
|
9.8%
|