Flutter Entertainment Peter Jackson

Flutter maintains growth in tricky 2022 as focus shifts on FanDuel break-away

Flutter Entertainment Plc has delivered on the objectives of a transformative 2022, maintaining ‘rapid US expansion’ whilst successfully integrating the new assets of Tombola and Sisal to diversify its home and international units.

Announcing its full-year 2022 preliminary results, Flutter achieved group revenue results of £7.69bn, up 27% on corresponding FY2021 figures of £6.03bn.

The FTSE100 gambling group maintains its peak KPI performance, growing its average monthly customer base to 10.2m players, reflecting a 26% increase on 2021 results of 8.1m.

Group EBITDA stood at £918m, with bottom-line results accounting for £160m in the ‘” guided headwinds of proactive safer gambling initiatives in the UK & Ireland (£38m) (ii) Australian tax changes (£22m) and (iii) regulatory changes in International markets (£100m)” – excluding US results, Flutter declared an adjusted EBITDA of £1.29bn.

FanDuel ‘Growth Child’

FY2022’s headline objectives were achieved as its FanDuel division strengthened its ‘US number-1 position’, taking control of “+50% of sportsbook market share.”

Doubling its revenues to £2.6bn (FY2021: £1.3bn), FanDuel would hit the upper-end of its expected guidance. However, the ‘fast-growth’ unit’s EBITDA contribution stood at a loss of £250m (FY2021: – £243m) – attributed to its New York activities that doubled its overall cost of sales to £1.3bn. 

Expanding in five new US states, FanDuel sales and marketing costs increased by £301m to £964m ($1.2bn) – as Flutter booked in total US adjusted losses of £328m (FY2021: £289m).

CEO Peter Jackson remarked on US results: “We have an unparalleled number one position in the US where we continue to go from strength to strength. The combined power of the ‘FanDuel Advantage’ and the ‘Flutter Edge’ delivered our most successful launches to date in Maryland and Ohio.

“Leveraging our number one FanDuel brand we had a record Super Bowl and have acquired over 1.2m customers in 2023 so far.”

Mixed Home Market Results

In the UK-&-Ireland, Flutter’s home market unit would achieve a 4% increase in revenues to £2.1bn (FY2021: £2.05bn) – as home market brands recovered against tough H1 trading.

Mixed results were detailed for its online unit, as sportsbook revenues stood at £998m, below the £1bn mark. Flutter explained,: “Sports results were slightly adverse for the year, including 300 basis points of adverse Q4 results mostly offset across the earlier quarters.”

Online Sportsbook drags were offset by UK-&-IRE Gaming brands achieving a 21% increase in revenues to £873m (FY2021: £721m), attributed to the successful integration of Tombola and improved product delivery across its brand portfolio.

Despite its H2 pick-up UK-&-IRE online EBITDA contribution fell by 3% to £612m, generating online profits of £524m (FY2021: £541m).

Supporting its UK-&-Ireland recovery, Flutter’s Paddy Power retail unit achieved revenues of £272m and an EBITDA contribution of £42m – as retail performance returns to circa 87% of 2019 levels

Sisal refreshes International unit’s performance and outlook 

Flutter hails the performance of a revived International Unit, boosted by the new integration of Sisal Italia.

An enlarged portfolio which accounts for the brands of Sisal, PokerStars, Adjarabet, Betfair International and Junglee India, achieved a 31% increase in Fy2022 revenues to £1.68bn (FY2021: £1.28bn).

The unit achieved an EBITDA outcome of £358m (+22%) – despite absorbing £100m in combined negative regulatory impacts related to headwinds in Germany, Russia and the Netherlands

Flutter underlined the positive five-month contribution of Sisal which generated a positive EBITDA  outcome of £111m, maintaining growth in Italy and Turkey

“Outside of the US we have been pleased with the performance of the business as we faced into regulatory changes and challenging comparatives. We are well placed to build on gold medal positions in our mature markets while we are delivering very strong growth in a range of attractive high-growth markets. “

“We have been really excited to add Sisal, the number one operator in the Italian market, to our brand portfolio, and we are making good progress with our integration strategy.” 

Flutter concluded its statement by reaffirming its 2023 headline target that FanDuel will become the US market’s first EBITDA positive business. Shareholders were informed that Flutter had begun to review a potential separate US listing for FanDuel announced in February.

“We have begun an extensive consultation with our shareholders and early feedback has been supportive. We look forward to continued engagement with investors and stakeholders on this matter and we will announce the results of this engagement in due course”

 

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