1. business and industrial

2014 final results
presentation
27 February 2015
James Henderson, CEO
Neil Cooper, Group Finance Director
1
19 times Champion Jockey AP McCoy has announced his retirement in 2015.
Small pictures, top to bottom: entering the parade ring on Carlingford Lough after winning the Hennessy Gold Cup during the
Hennessy Gold Cup Day at Leopardstown Racecourse, Ireland, February 2015; and on Binocular on his way to victory in the
williamhill.com Christmas Hurdle Race, January 2011
Disclaimer
This presentation has been prepared by William Hill PLC (“William Hill”). This presentation includes statements that are,
or may be deemed to be, “forward-looking statements”. These forward-looking statements can be identified by the use
of forward-looking terminology, including the terms "believes", "estimates", "anticipates", "expects", "intends", "plans",
"goal", "target", "aim", "may", "will", "would", "could" or "should" or, in each case, their negative or other variations or
comparable terminology. These forward-looking statements include all matters that are not historical facts. They appear
in a number of places throughout this presentation and the information incorporated by reference into this presentation,
and include statements regarding the intentions, beliefs or current expectations of the directors, William Hill or the
Group concerning, amongst other things, the results of operations, financial condition, liquidity, prospects, growth,
strategies and dividend policy of William Hill and the industry in which it operates.
By their nature, forward-looking statements involve risks and uncertainties because they relate to events and 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 and hence may prove to be erroneous. The
Group's actual results of operations, financial condition, liquidity, dividend policy 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. In addition, even if the results of
operations, financial condition, liquidity and dividend policy of the Group and the development of the industry in which it
operates are consistent with the forward-looking statements contained in this presentation and/or the information
incorporated by reference into this presentation, those results or developments may not be indicative of results or
developments in subsequent periods.
Other than in accordance with its legal or regulatory obligations (including under the Listing Rules, the Disclosure and
Transparency Rules and the Prospectus Rules), William Hill does not undertake any obligation to update or revise
publicly any forward-looking statement, whether as a result of new information, future events or otherwise.
2
2014: a record year
World Cup
372.2
330.6
276.8
Retail
Online
Australia
3%
335.0
6%
275.7
Other
3%
8%
UK
Non-UK
15%
18%
85%
82%
2013
2014
30%
32%
61%
2010
2011
2012
2013
2014
£372.2m
Record operating
profit1, up 11%
3
1.
2.
2013
57%
2014
40%
of net revenue from
digital businesses2
Operating profit/loss is defined as pre-exceptional profit/loss before interest and tax, and the amortisation
of specific identified intangible assets recognised on acquisitions
Online and William Hill Australia
18%
of net revenue from
international markets
Neil Cooper
2014 financial results
My Tent Or Yours ridden by Tony McCoy wins the williamhill.com
Christmas Hurdle Race during Day One of the William Hill Winter
Festival at Kempton Park Racecourse, December 2013
4
A year of record operating profit
52 weeks ended
30 Dec 2014
£m
52 weeks ended
31 Dec 2013
£m
% Change
Amounts wagered1
8,945.7
7,800.8
+15%
Net revenue
1,609.3
1,486.5
+8%
372.2
335.0
+11%
(9.0)
(10.9)
-17%
Net finance costs
(45.9)
(44.3)
+4%
Tax
(63.1)
(32.2)
+96%
-
(15.3)
-
254.2
232.3
+9%
29.9
28.8
+4%
602.8
796.0
-24%
12.2
11.6
+5%
Operating profit2
Amortisation
Non-controlling interest
Retained profit
Basic, adjusted EPS (p)3
Net debt for covenant purposes
Dividend per share (p)
5
Numbers are presented on a pre-exceptional basis.
1. Amounts wagered comprises the gross takings in OTC, Telephone, US, Australia and Online Sportsbook, and
net revenue in Retail gaming machines and Online gaming products.
2. Operating profit is defined as pre-exceptional profit before interest and tax, before the amortisation of specific
intangible assets recognised on acquisitions.
3. Basic, adjusted EPS is based on profit for the period before exceptional items and before the amortisation of
specific intangible assets arising on acquisitions.
Exceptional items
52 weeks ended
30 Dec 2014
£m
52 weeks ended
31 Dec 2013
£m
Accelerated Australian brand amortisation
(44.5)
-
One-off shop portfolio closure
(19.4)
-
European indirect taxation provision
(9.7)
-
tomwaterhouse.com integration
(3.3)
(2.0)
Revaluation of tomwaterhouse.com earn-out
(2.2)
-
Write-off of unamortised finance fees
(2.0)
-
-
(1.7)
Australia management restructuring cost
(1.8)
-
Repayment of VAT refund and interest
(0.5)
(5.6)
Sportingbet acquisition and integration
-
(13.5)
(83.4)
(22.8)
Release of tax provision
15.4
-
Tax consequence of exceptional items
20.1
1.7
(47.9)
(21.1)
Write-off of fees on bridge loan
Pre-tax
Post-tax
6
Retail gaming growth and strong cost control
mitigate OTC margin decline
52 weeks ended
30 Dec 2014
£m
52 weeks ended
31 Dec 2013
£m
% Change
2,452.2
2,439.9
+1%
449.7
472.8
-5%
18.3%
19.4%
-1.1 ppts
Machines gross win
461.8
440.0
+5%
Total gross win
911.5
912.8
-0%
Net revenue1
911.4
907.0
+0%
Cost of sales
(209.9)
(203.3)
+3%
Gross profit
701.5
703.7
-0%
(508.3)
(507.4)
+0%
193.2
196.3
-2%
OTC amounts wagered
OTC gross win
OTC gross win margin
Operating costs
Operating profit2
7
1.
2.
Adjusting for the Machine Games Duty effect, Retail net revenue was flat.
Operating profit is defined as pre-exceptional profit before interest and tax, before the amortisation of
specific intangible assets recognised on acquisitions.
Retail OTC wagering and margin trends
Amounts wagered: H1 2014 v H1 2013
% Change in amounts wagered
40%
Gross win margin: full year trend
35%
35%
2014
30%
30%
20%
25%
2%
0%
-3%
-10%
Horseracing
-1%
-5%
Greyhounds
Football
Other
Total
Retail gross win margin
10%
20%
15%
10%
Amounts wagered: H2 2014 v H2 2013
5%
% change in amounts wagered
4%
0%
2%
0%
-2%
0%
-1%
-1%
-4%
-6%
Horseracing
8
3%
-5%
Greyhounds
Football
Other
Total
2013
Retail gross win per machine shows good growth
52 weeks ended
30 Dec 2014
52 weeks ended
31 Dec 2013
% Change
Average number of LBOs
2,406
2,401
+0%
Average number of machines
9,458
9,431
+0%
Machine density
3.93
3.93
-
Gross win per machine per week
£939
£897
+5%
3.44%
3.37%
+0.07 ppts
Machine gross win margin
£m
Machine quarterly gross win growth
118
117
116
115
114
113
112
111
110
109
8.0%
7.0%
7.6%
5.0%
4.8%
Compared with 52 weeks of 2012
3.0%
2.0%
1.0%
0.0%
Q2 2014
Gross win
1.
4.0%
4.3%
3.3%
Q1 2014
9
6.0%
Q3 2014
Q4 2014
Growth % (2014 v 2013)
Retail demonstrates good cost control
52 weeks ended
30 Dec 2014
£m
52 weeks ended
31 Dec 2013
£m
% Change
Employee costs
(195.2)
(199.9)
-2%
Property costs
(101.4)
(102.8)
-1%
Content costs
(70.2)
(64.3)
+9%
Depreciation
(29.5)
(28.4)
+4%
Other costs incl. recharges
(112.0)
(112.0)
-
Operating costs
(508.3)
(507.4)
+0%
£m
Retail cost causal
10
510
508
506
504
502
500
498
496
494
492
490
507.4
5.3
(4.3)
0.8
1.1
(2.6)
0.3
(1.3)
(7.0)
8.6
508.3
Online revenue growth from both Sportsbook and
Casino
52 weeks ended
30 Dec 2014
£m
52 weeks ended
31 Dec 2013
£m
% Change
253.3
212.9
+19%
Casino
235.5
191.0
+23%
Poker
14.9
18.2
-18%
Bingo
23.7
24.2
-2%
Gaming net revenue
274.1
233.4
+17%
Net revenue
527.4
446.3
+18%
Cost of sales
(51.0)
(40.2)
+27%
Gross profit
476.4
406.1
+17%
(298.7)
(258.3)
+16%
177.7
147.8
+20%
Sportsbook
2014 Online net revenue
by geographic split
17%
4%
5%
74%
Operating costs
Operating
11
1.
profit1
Operating profit is defined as pre-exceptional profit before interest and tax, before the amortisation of
specific intangible assets recognised on acquisitions.
UK
Italy
Spain
Other
Online wagering increased, pre-match margins
weaker
52 weeks ended
30 Dec 2014
52 weeks ended
31 Dec 2013
% Change
2,467.9
2,360.7
+5%
213.7
189.1
+13%
1,225.2
1,141.0
+7%
107.8
107.4
+0%
Sportsbook amounts wagered (£m)
3,758.2
2,931.7
+28%
- Pre-match amounts wagered (£m)
2,116.1
1,724.5
+23%
- In-play amounts wagered (£m)
1,642.1
1,207.2
+36%
Sportsbook gross win margin
7.6%
8.1%
-0.5 ppts
- Pre-match gross win margin
9.3%
10.0%
-0.7 ppts
- In-play gross win margin
5.3%
5.3%
-
Unique active players (’000)1
Revenue per unique active player (£)
New accounts (’000)2
Average cost per acquisition (£)3
12
1. Placed a bet within the period
2. Registered and transacted within the period
3. Including affiliates
Business expansion drives cost base expansion
52 weeks
ended 30
Dec 2014
£m
52 weeks
ended 31
Dec 2013
£m
% Change
(53.0)
(45.1)
+18%
(132.1)
(122.5)
+8%
Finance charges
(20.3)
(16.6)
+22%
Depr. and amortisation1
(26.6)
(18.9)
+41%
Other costs incl.
recharges
(66.7)
(55.2)
+21%
Operating costs
(298.7)
(258.3)
+16%
Employee costs
Marketing
•
•
13
Sportsbook free bets / amounts wagered ratio 0.8%
Marketing / net revenue ratio 25%
1.
Excludes £1.3m of Online amortisation relating to acquired intangibles (2013: £4.0m)
Doubling of Australian profit
52 weeks ended
30 Dec 2014
£m
41 weeks ended
31 Dec 2013
£m
% Change
Pro-forma local
currency
change
%
1,388.7
1,177.1
+18%
+0%
Gross win
129.4
92.5
+40%
+12%
Win margin
9.3%
7.9%
+1.4ppts
+1.0 ppts
Net revenue
121.9
86.7
+41%
+11%
Cost of sales
(30.1)
(20.2)
+49%
+19%
Gross profit
91.8
66.5
+38%
+9%
(67.1)
(54.5)
+23%
-8%
24.7
12.0
+106%
+121%
Unique active players (’000)
324.0
247.9
+31%
+15%
Revenue per unique active (£)
376.2
349.7
+8%
-3%
New accounts (’000)
142.1
95.9
+48%
+4%
Average cost per acquisition (£)
192.5
298.7
-36%
-25%
Amounts wagered
Operating costs
Operating profit1
14
1.
Operating profit is defined as pre-exceptional profit before interest and tax, before the amortisation of
specific intangible assets recognised on acquisitions.
Good progress but Australian returns lag expectation
•
Achievements to date
–
–
–
–
Systems upgrades
tomwaterhouse.com (TW) purchase and integration
Management restructure
Marketing mix rebalanced, CPA lowered
•
Rebranding has commenced
•
Headwinds
–
–
•
Now expect returns of Sportingbet and TW taken together to exceed
WACC by 2018
–
–
15
Currency
Race field fees
Previous guidance of 2016, inclusive of TW
Earnings enhancing from 2014
William Hill US
52 weeks ended
30 Dec 2014
£m
52 weeks ended
31 Dec 2013
£m
% Change
Local currency
% change
Amounts wagered
375.7
310.2
+21%
+27%
Gross win margin
7.9%
7.3%
+0.6 ppts
+0.6 ppts
Net revenue
29.7
22.7
+31%
+36%
Cost of sales
(2.5)
(2.0)
+25%
+32%
Gross profit
27.2
20.7
+31%
+36%
(17.5)
(15.8)
+11%
+16%
9.7
4.9
+98%
+99%
Operating costs
Operating profit1
16
1.
Operating profit is defined as pre-exceptional profit before interest and tax, before the amortisation of specific
intangible assets recognised on acquisitions.
Strong cash inflows
52 weeks ended
30 Dec 2014
£m
52 weeks ended
31 Dec 2013
£m
Change £m
438.0
390.3
47.7
(9.1)
(8.1)
(1.0)
(34.6)
(16.0)
(18.6)
47.1
(12.5)
59.6
Tax
(34.5)
(55.9)
21.4
Interest
(43.6)
(41.3)
(2.3)
4.9
11.1
(6.2)
368.2
267.6
100.6
Pre-exceptional EBITDA
Pension contribution
Exceptional cash
Working capital
Other
Cash flow from operating
activities
• Cessation of non-controlling interest broadly offsets cash dividend increase,
to £104m in total
• Capex shortfall versus expectations (£75m versus £80-90m)
17
Capex
52 weeks ended
30 Dec 2014
£m
52 weeks ended
31 Dec 2013
£m
Retail development1
25.2
38.8
Online
35.6
31.9
Australia
5.8
2.8
US
2.2
2.6
Other (including IT)
5.8
8.5
74.6
84.6
Total cash capital expenditure
•
•
•
18
Estate fell by a net 70 shops to 2,362 (52 openings, 14 closures,
eight re-sites and 108 portfolio closures)
2015 cash capex expected to be £80-90m
Exceptional provision of £12.4m relating to portfolio closure at year-end
1. Gross of proceeds on disposal
Balance sheet supportive of strategic agenda
•
Debt levels falling in 2014
–
–
–
–
•
Corporate financing activity through the year
–
–
•
Refinancing of existing revolving credit facility
New £540m five-year facility now in place
As at 30 December 2014, the Group had balanced spread of debt maturities
–
–
19
£180m debt pay down
£15m increase in cash in hand
Net debt of £602.8m on bank covenant basis at 30 December 2014
Net debt/EBITDA at 1.4x against 3.5x maximum covenant (2013: 2.0x)
Circa 90% of gross debt fixed, rather than floating
No debt maturity in 2015
Other finance matters
•
Effective pre-exceptional income statement tax rate of 19.9%
–
–
•
Formal three-year actuarial pension valuation process completed
–
–
•
20
Prior year rate, at 11.5%, benefited from deferred tax credit
Effective full-year income statement rate expected to be 19% in 2015, expected cash tax rate to
be 20% in 2015
c£9.4m annual deficit repair payment to May 2019
Accounting surplus, driven by reduced liability valuation and strong investment returns
Dividend:
2014
2013
% Change
Interim
4.0p
3.7p
+8.1%
Final
8.2p
7.9p
+3.8%
Full
12.2p
11.6p
+5.2%
James Henderson
Performance and
strategy update
AP McCoy winning the Connolly's Red Mills Horsecare Cubes
Novices' Chase on Malt Master at Huntingdon, January 2013
21
2014 achievements in a record year
Mobile as % of Online net revenue
£m
600
•
Another resilient Retail performance
500
400
•
Continued strong growth in Online
30%
43%
70%
57%
300
200
•
William Hill US operating profit up 98%1,2
100
0
2013
•
•
William Hill Australia operating profit1 doubles
during period of substantial change
Good progress on responsible gambling measures
1.
22
2.
Desktop
2014
Mobile
+48% +117%
growth in mobile
Sportsbook
net revenue
Operating profit/loss is defined as pre-exceptional profit/loss before interest and tax, and the amortisation
of specific identified intangible assets recognised on acquisitions
On a statutory basis
growth in mobile
gaming
net revenue
Assessing the ‘black swan’ effect
While football margins are stable…
…and accumulators are now a higher % of mobile1
Online pre-match betting gross win margin by calendar year
14%
13%
12%
11%
54%
61%
62%
39%
38%
2013/14
2014/15
10%
2012
2013
2014
…margins are affected by accas…
Online pre-match betting gross win margin by football season
46%
30%
25%
2012/13
20%
Singles
15%
10%
5%
0%
2011/12
Singles
23
1.
2012/13
2013/14
Accumulators
2014/15 to
date
Pre-match average
By amounts wagered on football during the UK domestic football season
Accas
Substantial progress on responsible gambling
Implemented
March 2014
Q4 2014
ASA, BCAP, CAP
advertising reviews
concluded, voluntary
restrictions agreed
Launched
October 2014
24
January 2015
‘Set Your Limits’
is made mandatory
Research published
December 2014
GambleAware Week
January 2015
April 2015
Launch of the
£50 journey
Regulatory update
•
£50 journey to be implemented 6 April 2015
•
Point of Consumption Tax implemented
December 2014
•
Consultations on the Horserace Betting Levy,
contributions from offshore operators and
possible replacement with a betting right
•
4th EU Money Laundering Directive
•
Responses awaited on planning and
advertising
25
Online UK performance in H2 2014
Net revenue
New accounts
Unique actives
Revenue per active
Cost per acquisition
+29%
+7%
+17%
+10%
+4%
Retail remains resilient
Further technology
enhancements
•
•
Video walls in 16% of shops
Digital window display trial
OTC turnover
Retail gross win
4%
6%
17%
46%
9%
7%
15%
14%
17%
59%
Continued product
evolution
•
•
•
•
5% CAGR in football turnover1
50% increase in SSBT football
markets with Online feed
Eclipse in 70% of estate2
B2 gross win +3%, B3 +11%3
51%
4%
3%
10%
12%
52%
6%
4%
8%
11%
25%
2010
Horse racing
Greyhounds
Other
2014
20%
2010
Horse racing
Greyhounds
Other
Football
Virtual
Retail five-year financial performance (£m)
911.4
907.0
•
Strong cost focus
•
•
•
Extended single manning
successfully implemented
Like-for-like rent flat in 2014
Rolling onto CPI/RPI increases
for content costs 2015-2017
Closure portfolio benefits cost
progression
837.9
789.7
783.1
204.5
2010
196.8
2011
Net revenue
26
1.
2.
3.
2010 to 2014
As at 2014 year-end
Year on year
2014
Football
Virtual
Gaming
211.5
2012
196.3
2013
Operating profit
193.2
2014
Online leadership through innovation
Darts app
Cash In My Bet
Vegas app
AccaInsurance
Priority Access
card
Vegas Mayfair
games
Product
expansion:
horse racing
Live Casino and
scratchcards
Product
expansion:
other
27
•
•
•
•
•
•
Italy: Sportsbook and Casino iOS
Spain: Sportsbook and Casino
Darts
Vegas iPad
Live Casino iPhone
Sportsbook, Casino, Vegas refreshes
Online leadership through innovation
Darts app
Cash In My Bet
Vegas app
AccaInsurance
Priority Access
card
Vegas Mayfair
games
Product
expansion:
horse racing
Live Casino and
scratchcards
Product
expansion:
other
28
•
•
•
Launching shortly
By invitation only
Priority access to the funds in your Online account
Online leadership through innovation
Darts app
Cash In My Bet
Vegas app
AccaInsurance
Priority Access
card
Vegas Mayfair
games
Product
expansion:
horse racing
Live Casino and
scratchcards
Product
expansion:
other
29
•
Extensive ‘Daily Meeting Markets’ range
Online leadership through innovation
Darts app
Cash In My Bet
62,606
39,392
Football events
covered, +6%
Tennis events
covered, +19%
Vegas app
AccaInsurance
17,015
138,419
Basketball events
covered, +17%
Priority Access
card
Vegas Mayfair
games
Product
expansion:
horse racing
Events covered in
total, +11%
Further strong turnover growth in key products
39%
39%
41%
36%
28%
Live Casino and
scratchcards
23%
Product
expansion:
other
Football
30
Tennis
Basketball
Pre-match
In-play
Total
Online leadership through innovation
£40m 1.2 million
Darts app
Cash In My Bet
Vegas app
Cashed in on
football in 2014/15
season so far
AccaInsurance free
bets in 2014/15
season so far
Extending Cash In My Bet
AccaInsurance
Priority Access
card
Vegas Mayfair
games
Product
expansion:
horse racing
Live Casino and
scratchcards
Product
expansion:
other
31
Online leadership through innovation
+68%
Darts app
Cash In My Bet
Vegas app
AccaInsurance
Priority Access
card
Vegas Mayfair
games
Product
expansion:
horse racing
Live Casino and
scratchcards
Product
expansion:
other
32
growth in net
revenue from
proprietary Vegas
platform
+50%
growth in net
revenue from
Live Casino
Strategic priorities: omni-channel
Maximising
multi-channel
share of wallet
‘One William Hill’
product
and content
Customer-focused,
technology-led
experience
54%
34%
of Online’s regular
customers regularly
bet in LBOs
of Retail’s regular
customers regularly
bet online
Tip Advisor in
Retail
33
Retail TV to
Online
US racing to
Online
Online football
content to
SSBTs
Gantry
alignment
Strategic priorities: international
US operating
profit1,2 ($m)
US turnover
($m)1
Australia operating
profit (A$m)2,3
247
15.7
45.1
36
370
338
2013
Retail
2014
7.9
-0.9
17.0
2012
2012
2013
Sisal
8%
20.4
Bwin
8%
2013
1.
2.
3.
4.
5.
William Hill
19%
Lottomatica
10%
2014
Eurobet
9%
William Hill
9%
tomwaterhouse.com
integration
Australia
responsive design
launch
34
2014
Paddy Power
7%
Mobile
US mobile
turnover
+65%
Other
7%
Sportium
8%
Bet365
28%
Snai
7%
174
Spain Sportsbook
market share5
Others, 14%
150
2012
Italy Sportsbook
market share4
Australia
management
change
Australia
product
expansion
Palinsesto
Supplementare
rollout in Italy
William Hill brand
launch
2012 numbers are on a statutory reporting basis from the date of ownership
Operating profit/loss is defined as pre-exceptional profit/loss before interest and tax, and the amortisation
of specific identified intangible assets recognised on acquisitions
On a pro forma basis
Source: AAMS
Source: company estimates
Bet365
46%
Bwin
20%
Live Casino
launch in Spain
Net revenue:
Italy +39%
Spain +64%
Strategic priorities: technology
EXTERNAL GATEWAY
GAMING
RETAIL DISPLAY
SPORTSBOOK UI
MOBILE BETTING UI
TRAFALGAR FRONT END FRAMEWORK
FRONT
END
William Hill
ACCOUNT
OpenBet
Playtech
PAYMENT
MONITORING
SECURITY
CASINO,
POKER, BINGO
COMMUNITY
VEGAS
TRADING
PRODUCT
SETTLEMENT
BET CAPTURE
TRADING HUB
WILLIAM HILL API (SERVICE LAYER)
CORE
SYSTEMS
WALLET
DATA WAREHOUSE
BUSINESS INTELLIGENCE
Increased
front-end
independence:
Project Trafalgar
35
1.
700
people in IT
team globally
Excludes depreciation and amortisation
Flexible
framework:
William Hill API,
Central Feeds
£98m
IT opex and
capex in 20141
Ring-fenced
back-end
solution
Summary
•
Record 2014 performance
•
Continued strong Online growth
•
Underpinned by cash-generative Retail
•
Good operating profit progress from US and Australia
•
Clear strategy for continued digital and international diversification
36
37
1/5
Hung Parliament
4/1
9/2
Conservative-Liberal Democrat coalition
Coalition involving SNP
9/2
5/1
11/2
Conservative minority government
11/2
Labour-Liberal Democrat coalition
7/1
9/1
20/1
33/1
50/1
500/1
Labour minority government
Conservative majority
Coalition involving UKIP
Labour majority
Coalition involving Greens
Conservative-Labour coalition
UKIP majority
Liberal Democrat majority
APPENDICES
38
Performance by division
Net revenue1
Operating profit2
52 weeks ended
30 Dec 2014
£m
52 weeks ended
31 Dec 2013
£m
% Change
52 weeks ended
30 Dec 2014
£m
52 weeks ended
31 Dec 2013
£m
% Change
Retail
911.4
907.0
+0%
193.2
196.3
-2%
Online
527.4
446.3
+18%
177.7
147.8
+20%
11.8
16.5
-28%
(0.8)
(0.0)
n/a
121.9
86.7
+41%
24.7
12.0
+106%
29.7
22.7
+31%
9.7
4.9
+98%
7.1
7.3
-3%
(0.1)
0.2
-150%
-
-
-
(32.2)
(26.2)
+23%
1,609.3
1,486.5
+8%
372.2
335.0
+11%
Telephone
William Hill Australia
William Hill US
Other
Corporate
Total
1.
39
2.
Group, Retail and gaming machine net revenue growth is flattered by the transition from VAT and Amusement
Machine Licence Duty to Machine Games Duty on 1 February 2013.
Operating profit is defined as pre-exceptional profit before interest and tax, before the amortisation of specific
intangible assets recognised on acquisitions.
Net operating expenses by division1
52 weeks ended
30 Dec 2014
£m
52 weeks ended
31 Dec 2013
£m
% Change
Retail
(508.3)
(507.4)
+0%
Online
(298.7)
(258.3)
+16%
Telephone
(12.5)
(16.5)
-24%
William Hill Australia
(67.1)
(54.5)
+23%
William Hill US
(17.5)
(15.8)
+11%
(6.3)
(6.2)
+2%
(33.2)
(29.6)
+12%
(943.6)
(888.3)
+6%
Other
Corporate
Group net operating expenses
40
1.
Numbers are presented on a pre-exceptional basis, excluding the amortisation of the specific
intangible assets arising on acquisitions and net of other income.
Telephone
52 weeks ended
30 Dec 2014
£m
52 weeks ended
31 Dec 2013
£m
% Change
212.2
252.0
-16%
12.6
17.4
-28%
6.0%
6.9%
-0.9 ppts
Net revenue
11.8
16.5
-28%
Cost of sales
(0.1)
(0.0)
-
Gross profit
11.7
16.5
-29%
Staff costs
(1.0)
(1.7)
-41%
Marketing costs
(2.3)
(2.4)
-4%
Other costs incl. recharges
(9.2)
(12.4)
-26%
(12.5)
(16.5)
-24%
(0.8)
0.0
-
Amounts wagered
Gross win
Gross win margin
Operating costs
Operating (loss)/profit1
41
1.
Operating profit is defined as pre-exceptional profit before interest and tax, before the amortisation of
specific intangible assets recognised on acquisitions.
Net finance costs
52 weeks ended
30 Dec 2014
£m
52 weeks ended
31 Dec 2013
£m
Interest receivable
(1.0)
(1.1)
Bank loan interest
6.5
10.6
37.2
30.4
Amortisation of finance fees
2.6
3.7
Net interest on pension scheme net liability
0.6
0.7
45.9
44.3
Bond interest
Total pre-exceptional net finance costs
42
Net debt for covenant purposes
Bank loans
Corporate bonds
Cash
Net debt
Obligations under bank guarantees
Restricted cash – client balances
Other restricted cash
Net debt for covenant purposes
As at 30 Dec
2014
£m
As at 31 Dec
2013
£m
50.0
230.0
675.0
675.0
(222.1)
(206.7)
502.9
698.3
3.2
3.0
89.7
85.8
7.0
8.9
602.8
796.0
• Net debt: EBITDA of 1.4x vs maximum covenant of 3.5x (31 Dec 2013: 2.0x)
• EBITDA: Net cash interest of 10.4x vs minimum covenant of 3.0x
• BB+/Ba1 stable outlook credit ratings from S&P/Moody’s
43
Australia performance in local currency (pro forma)
52 weeks
ended 30
Dec 2014
A$m
52 weeks ended
31 Dec 2013
A$m
% Change
2,542.9
2,530.3
+0%
Gross win
236.7
211.0
+12%
Win margin
9.3%
8.3%
+1.0 ppts
Net revenue
223.0
200.5
+11%
Cost of sales
(55.2)
(46.5)
+19%
Gross profit
167.8
154.0
+9%
(122.7)
(133.6)
-8%
45.1
20.4
+121%
324.0
282.1
+15%
688
711
-3%
New accounts (’000)
142.1
136.8
+4%
Average cost per acquisition (A$)
351.9
467.8
-25%
Amounts wagered
Operating costs
Operating profit1
Unique active players (’000)
Revenue per unique active (A$)
44
1.
Operating profit is defined as pre-exceptional profit before interest and tax, before the amortisation of specific
intangible assets recognised on acquisitions.
US performance in local currency
52 weeks ended
30 Dec 2014
$m
52 weeks ended
31 Dec 2013
$m
% Change
617.3
487.6
+27%
48.6
35.8
+36%
7.9%
7.3%
+0.6 ppts
Net revenue
48.6
35.8
+36%
Cost of sales
(4.1)
(3.1)
+32%
Gross profit
44.5
32.7
+36%
(28.8)
(24.8)
+16%
15.7
7.9
+99%
Amounts wagered
Gross win
Win margin
Operating costs
Operating profit1
45
1.
Operating profit is defined as pre-exceptional profit before interest and tax, before the amortisation of specific
intangible assets recognised on acquisitions.