Good morning, everybody, and welcome to Entain's 2025 Half-Year Results Presentation. I'm delighted to be here to give you a strong set of numbers. This morning, I'm joined on the stage by Rob Wood, our CFO and Deputy CEO, and also Satty Bhens, who is our Chief Product & Technology Officer. If I go to the agenda, I'm going to start off by sharing with you some of the highlights of the strong progress that we have made in the first half of this year. Rob is going to dig into the financials, looking both at trading and the outlook. It is going to be back to me to look at achievements against our strategic priorities and how far we have come on our journey of transformation. A key part of transformation is technology, which is why Satty is here today.
He is going to talk about where we are on our tech journey, what we've achieved so far, and importantly, what our thinking and planning is for the future. Finally, I will briefly wrap up before I'm going to open up to your questions. Now to our headline results. As I said at the beginning, I'm very pleased with our H1 performance. Year on year growth was a little ahead of expectations, which is encouraging as we're lapping the comps from last year when we had both the Euros and Copa America. The UK and BetMGM in particular exceeded expectations. Importantly, we also saw strong growth across many of our other markets: Brazil, Georgia, Spain, New Zealand, Canada, Croatia, all in double-digit growth. Our strategic priorities are clear, and our focus on operational execution is now delivering the results.
Our online business is now growing at least in line with our markets, and our growth is efficient and profitable because we are seeing EBITDA margin growth too. Entain's transformation is well underway, and it's gathering pace. The business is getting sharper, fitter, and faster, becoming more agile, more disciplined, and the returns are making sure that we have many improvements to our player journeys and our experiences. Our product and tech teams have made significant strides. Not only is that vital today, but it's critically important as we pave our pathway forward, providing flexibility and optionality in the future. Good progress, but there is still lots more to do. We have upgraded our guidance for financial year 2025 for both online growth and online EBITDA margin.
At the same time, we're taking the positive opportunity of increasing our marketing investment in H2, which will set us up really well for 2026 and beyond. This revenue and earnings growth reinforces our clear pathway to strong cash generation. On that note, let me now hand over to Rob.
Thanks, Stella, and good morning, everyone. It's a familiar format from me this morning, so let's jump straight in with our financial highlights for the first half. As usual, all revenue growth numbers that I give are in constant currency, unless dated otherwise. Let's start with revenue, and I'm really pleased with the growth we delivered in H1, which was ahead of expectations. Total group revenue, so including 50% of BetMGM, was GBP 3.1 billion, up 10% year on year. Within that, Online NGR (exc. US) was up 8%. That 8% is more like 10% adjusting for football tournaments. Better than expected, in particular thanks to another excellent half from the UK. As well as revenue, EBITDA was particularly strong in H1, both including and excluding the U.S. (exc. US)
EBITDA was up 11% year on year, despite our last major unregulated market, Brazil, going live with a new regime and new taxes from the beginning of the year. EBITDA, including the U.S., was up a very pleasing 32% on the prior year, which also drove very strong growth in our EPS, as you can see in the bottom left. Moving on to adjusted cash flow, which is a metric that deserves increased prominence, remembering that in March, we outlined our pathway to deliver over half a billion pounds of adjusted cash flow per annum from 2028. This metric was marginally negative last year, and this year, we're ahead by GBP 80 million at the half. Leverage now, and we're making good progress. In March, I spoke about ending this year in the mid-threes, including the DPA, and we're there now, ahead of plan.
Finally, dividends, we have declared an interim dividend of GBP 0.098 per share, which is a 5% rise in dividend per share, which is consistent with prior years and our progressive dividend policy. Let's turn now to online revenue and a closer look at growth over recent quarters. Whilst I'm not normally a fan of normalizing results, we've added the dotted line here to illustrate clear and consistent underlying growth at approximately 9% to 10% over the last four quarters. That's particularly pleasing as that's both ahead of our expectations and it's ahead of our markets, which we estimate have grown by approximately 7% over the same period. How have we grown ahead of the market? It's primarily due to the UK. If I look at growth over the last four quarters, but stripping out the U.K., growth drops to just over 7%, so almost exactly in line with market.
Therefore, now that we're lapping the UK's acceleration from last year, 7% is a good representation of our current underlying growth rate. Above all, the key message from this slide is that we're back growing consistently, and we're back growing at least in line with our markets. Now to our usual market breakdown, which again shows an almost entire sea of green. Let's start with the positives. In the U.K., we're very pleased with our performance, and we're rapidly recovering market share. Growth continues to be driven by player values, reflecting our improved player journeys, improved product, and improved marketing. Italy now, and we're comfortable with our position in this market. Our market share has been stable since Q3 of last year, and we therefore expect H2 year on year growth to be more in line with market growth. In Brazil, we're happy with our performance so far this year.
Adapting to a new regulatory environment always carries risks, so we're pleased that growth has continued into 2025. The market is yet to settle down and is highly competitive, but we're on track to meet our expectations for the year. New Zealand now, and online growth at plus 18% in H1 is great to see. Whilst the legislative net arrived later than expected, it is now effective and should therefore catalyze even greater growth in H2. Georgia keeps on growing with another double-digit performance, despite lapping the Georgian national team's excellent Euros performance last year, which drove strong volumes. Spain, Spain was a star performer, up almost 40%, responding well to increased focus. CEE next, where online was up 8% for H1, which is particularly pleasing considering the heavy product weighting towards football in the region, especially in Poland, and both countries' national teams played in the Euros last year.
The U.S., as you know, performed exceptionally well in H1, growing at 37% in online. This chart only shows our largest markets. We also delivered strong H1 performances across many other markets too, with double-digit growth also coming from Canada, Greece, Austria, and some of our Baltics and Nordics markets as well. The value of our diverse portfolio means that in aggregate, we can deliver total online revenue growth despite some of our geographies having an off-half, such as Australia, where the market continues to be soft and it was impacted by less favorable horse racing results. Netherlands and Belgium were also down due to regulatory tightening, which we'll analyze in Q4. Lastly, retail quickly, down at the bottom of the slide, retail was flat across the half and broadly in line with our expectations.
Before I move on, let me just step back for a moment and make a couple of observations. Firstly, this chart is a good illustration of our structural growth story in action. As I said, not all markets need to be performing perfectly for us to grow. Our diversification is a strength, particularly alongside our podium positions, and this gives us confidence of continued growth for years to come. Secondly, this chart shows that markets on our central Entain platform are performing well. The U.S., U.K., Brazil, Spain, they're all central platform markets, which is great evidence of the progress we have made, and you'll hear more on that from Satty later. Moving on now to our year on year EBITDA bridge slide, and this time we show both the (exc. US) business on the left-hand side, and we've added a view of EBITDA including the U.S. on the right-hand side.
Starting on the left, as I flagged in the highlights, (exc. US) EBITDA was up 11% in the half, or up GBP 60 million. Normalizing for the GBP 28 million FX drag, 11% growth improves to 18% in constant currency. That 18% growth in constant currency is despite absorbing new tax in Brazil, which is the next block along. Note we haven't broken out any BAU tax rate rises, this is just the introduction of the new tax in Brazil. The next purple bar is the Entain growth engine. Online added GBP 113 million year on year of organic EBITDA growth. What's driving that GBP 113 million increase? Three things. Firstly, NGR growth, as we've already seen. Secondly, favorable seasonality in marketing spends, as H1 last year had a higher mix of marketing to support the football tournaments.
Thirdly, we're ahead of expectations on Roma initiatives, particularly benefiting online cost of sales, and I'll come back to that later when discussing guidance. Online is up GBP 113 million year on year, and then retail and corporate are broadly flat. Despite FX and absorbing the new tax in Brazil, our EBITDA growth (exc. US) was ahead of our expectations and up GBP 60 million year on year. Let's now include the U.S. in our EBITDA bridge, and in addition to the GBP 60 million uplift we've just discussed, we can add our share of BetMGM's year on year improvement. That's a GBP 90 million year on year increase, which is a swing from -GBP 48 million last year to a +GBP 42 million this year. All in, therefore, total group EBITDA for H1 was up 32% year on year. Now, before we move to cash flow and debt, just a quick word on our efficiency program, Project Roma.
We announced this multi-year simplification and efficiency program back in November 2023, and we're firmly on track to exceed our upgraded expectation of at least GBP 100 million in annual benefits. We've seen good results across all areas of spend, including most recently exceeding expectation against online cost of sales, as I mentioned earlier. As with any multi-year program, over time, Roma activity has merged with BAU activity, and the program has now been fully in-house and fully integrated into the business. Therefore, going forward, I won't give specific updates on it, aside from when I cover efficiencies as part of our margin guidance. Let's now take a closer look at cash flow, which we have rightly shone a light on recently. As outlined in March, adjusted cash flow is bottom line cash flow pre-dividends, adjusted for working capital noise, and with M&A and debt movement stripped out.
In March, I said we expected 2025 to be broadly zero, before then rising towards half a billion pounds per annum from 2028 onwards. As you can see, this metric was + GBP 80 million for H1, so we're on track so far. Leverage has also improved year on year from 3.7x , including the DPA, this time 12 months ago, to 3.4x now, which is roughly where we expect to be at year-end, before then significantly deleveraging from 2026. Our cash flow is recovering, leverage is improving, liquidity is strong, we have a healthy debt maturity profile, particularly after recent term loan refinancings, and after seven years of injecting capital into building BetMGM, we now expect some level of cash to be returned to parents later this year. Now on to updated guidance, and the good news is, from this slide, all of our updates are favorable. Firstly, online NGR growth.
Our March guidance was for mid-single-digit growth in constant currency, with H1 expected to be stronger than H2, purely due to prior year comps, so lapping the UK acceleration in H2 and a strong margin in Q4. Now, our half-on-half expectation remains the same, but having banked H1 ahead of expectation at +8%, and with H2 starting well, we've nudged up full-year guidance to approximately 7% in constant currency, which implies approximately 6% in the second half of the year. Given an expected 2 to 3 percentage point FX drag year on year, that 7% in constant currency for the year equates to mid-single digits on a reported post-FX basis. We've also upgraded online EBITDA margin from approximately 25% previously to now being in a range of 25%- 26%, which is principally driven by outperformance on Project Roma cost of sales initiatives.
There are some other ups and downs, like geographical mix benefiting, offsetting a few minor tax increases, but what's particularly pleasing is that this margin upgrade has also been achieved whilst planning to increase marketing spend in H2. Effectively, we plan to reinvest some of the upside from H1 EBITDA into further marketing in H2 to maintain momentum into 2026 and beyond, and we do that while still delivering an upgrade versus March guidance. Moving on, retail EBITDA guidance is unchanged, and we now expect 2025 EBITDA to be within a range of GBP 1,100 million- GBP 1,150 million. Now, rather than covering it in Q&A, let me help you with what this EBITDA guidance implies for H2 EBITDA. At the midpoint, guidance implies that H2 EBITDA is down around GBP 40 million on H1 and down around GBP 20 million year on year. What's happening there?
Firstly, H2 is down on H1, principally because online marketing is materially higher in H2, given the planned investment I mentioned earlier and seasonality. Secondly, why is H2 EBITDA down GBP 20 million year on year? We still have the drags from FX in Brazil that we saw in the bridge earlier, and we have two marketing impacts to consider. One, we have the planned increase in H2 marketing that I mentioned a few moments ago, and two, we have the seasonality point. Football tournaments are now adverse year on year in H2, reversing the benefit that we saw in H1 that I mentioned earlier. Touching briefly on BetMGM now, as you heard from the team a couple of weeks ago, we enjoyed an excellent H1. Consequently, we've upgraded twice since March, and we now expect at least $150 million of EBITDA for the year.
Despite FX, Brazil tax, and increased marketing, the combined EBITDA guidance of Entain and BetMGM is projecting strong double-digit growth for 2025. To conclude, let me reinforce our medium-term cash guidance. As I said earlier, 2025 adjusted cash flow is on track to be broadly neutral, and we have three clear drivers to launch us to over GBP 500 million per annum in the medium term. Very pleasingly, H1 has seen significant progress against the top two of those drivers. Entain's (exc. US) has grown ahead of expectation, and BetMGM's inflection to profitability is now a certainty, which gives greater conviction in cash generation by BetMGM over the years ahead. We have made strong progress in the half, and we have increased conviction in these cash flow drivers. That's a positive place to be standing as we look ahead. With that, I'll hand back to Stella.
Thank you, Rob. Our strategic priorities are clear and unchanged, consistency being the magic ingredient. However, while they are unchanged at the headline level, we now have increased bandwidth and ambition. That means expanding beyond the urgent priorities that we set ourselves in 2024. It's very pleasing that the markets we've mentioned, like Canada, like Spain, like New Zealand, are in strong double-digit growth, but more meaningfully, they are generating substantial real value to the business, adding substantial incremental profitability. We're focused on the growth drivers, and those growth drivers are revenue growth and margin growth. We're also dialing up the focus on cash, as Rob mentioned, delivering growth in the right way, being more disciplined in how we invest our capital and how we conduct our operations.
Rob has already outlined our pathway to annually generating over GBP 500 million in cash flow, and that is a key component of adding long-term value creation. It is going to be, it is a focus of mine, and it's going to continue to be a focus of mine. I'm also delighted that all three of our must-win markets are performing strongly. The UK online and Brazil, both growing at 21%. BetMGM, 34%. Let me run through some of the highlights of what's behind these pleasing numbers. First of all, the UK. The market having returned to growth sooner than anticipated is continuing to beat expectations and sees us regaining significant market share. We're seeing growth not only in volume, but in player values. On top of the huge task of improving customer journeys, we've also been focusing in on product and player experiences. The apps are significantly faster.
We've enhanced our bet builder, in-play, cash-out, and bet tracker, and players are loving our coins economy reward system alongside the benefits of having our exclusive games and content. If I move to Brazil, it's been a very busy year so far, we launched successfully on day one of the new regulatory regime. To be honest, it's not always been plain sailing, but we have navigated the challenges, including re-registering and certifying all of our customers, and the performance is on track. The recent Club World Cup was particularly strong, with record levels of player activities and turnover. We do believe that we're well positioned going forward and are excited about the opportunities in H2 and beyond.
If I move to BetMGM, we all know that the interims have already been covered by Adam, and I think if you look at the results of the interims, it is quite clear that we are now entering a new and exciting phase for BetMGM. I'm equally proud that a key part of BetMGM's performance is the product improvements and the experience improvements that our players are finding. Entain's tech team delivered this in combination and partnership with BetMGM. That is a really good metric looking forward. By FY 2025, as Rob has mentioned, has been upgraded, and we are confident in BetMGM's pathway to a GBP 500 million EBITDA per year and beyond. It is no longer just about these three must-win markets. It's about increasing our bandwidth and also driving meaningful growth from other parts of the portfolio. I now move on to marketing and brands.
Amongst our iconic brands, we have some sleeping giants that we're just starting to reawaken. For example, in Spain, we have seen tremendous success in rekindling the love for the bwin brand. Great emotional advertising combined with performance marketing with excellent payback periods has resulted in that fantastic growth in H1 of 39% of NGR. We are increasingly confident that we can return bwin to where it should be in Spain, which is a podium player. Similarly, for Sportingbet in Brazil, we made sure that the relaunch of the brand took place well before the start of the new regulated market to set ourselves up well. If you look at the UK, as we're just warming up for the football season, we're seeing on Ladbrokes the launch last weekend of our new campaign, Ladisfaction. An increasing number of our geographies are now starting to use the benefits of 365 Scores.
70% of our investment in performance marketing is now managed by our 365 Scores team. You can see from the chart that the benefits are really proving themselves out. We have an 11% improvement in payback since we made that change. That change and the benefit of 11% has been done while we've also increased the level of absolute spend, showing that we are getting the returns that we need in this area. With growth coming from across our market portfolios, our KPIs of customer retention and acquisition are strong illustrations of the improving underlying momentum across the business. As a reminder, the combination of retention at over 85% and acquisition at over 15%, and my maths gets that too, over 100, means that we're in sustainable revenue growth. The chart in the middle shows that net revenue retention is holding up well above that 85% level.
The small dip that you see in June is just because of the Euro lapping. This high level reflects the hard work to close the product gaps and to enhance our customer journeys. Also, after a higher retained base, we're starting to see, we're seeing customer acquisition numbers sitting comfortably above the 15% level. In combination, these two metrics are a great indicator of future growth, which is why we're happy to be investing behind these marketing activities. We're also working hard at strengthening and improving our business. I know that I've shared this slide with you before, so I am repeating myself, but it is important. It demonstrates that Entain is operating in strong and attractive markets with strong foundations. First of all, we are a global leader in the industry that is in long-term growth.
Over 90% of our NGR is locally licensed, and Brazil was our last major market to shift to regulation and new taxes. Over 85% of our NGR is from markets where we have podium positions. 98% of group revenue is from markets which are in growth. 93% of our online revenue is from markets estimated to grow at at least mid-single digits, CAGR, over the next four years. These core pillars of strength underpin the sustainability and quality of our earnings growth and set us up to deliver constant returns and long-term shareholder value for many years ahead. However, to maximize these opportunities, we need to keep delivering significant strides forward in product and technology. This includes mapping out a plan that maximizes the flexibility and optionality that having a central platform and regional platforms offers. Satty is going to talk to that shortly.
We also need to keep improving our operational execution. This isn't rocket science. It's not about a silver bullet. It's about many, many iterative improvements to the way in which we work. Finally, as we continue to press ahead, my goal for this business is to become a true learning organization, have a true learning mindset. Why? Because it is one of the few areas of truly sustainable competitive advantage that there is. We must be learning. Customers, continue to listen to them and learn. What are they telling us? What are their behaviors? What do they like? We must embrace learning in the way that we do our business, utilizing our talent to improve our problem-solving and foster faster and more effective solutions and innovation.
If you want to know what goes on in my head, you may not want to, but I'm going to tell you, my internal mantra is one where we have the following. We need real people talking to real people in real time, solving real problems. If we can have that learning mindset and the associated behaviors, then we will have a sustainable, long-term winning culture. Now, over to Satty to talk about the excellent progress in product and tech. Satty.
Thank you, Stella. All right, the last time we connected, we had a long list of things in motion. I'm thrilled to say that we've not only delivered on all of them, but we've done plenty more. Let's talk about the improvements our customers are seeing. Previously, we talked a lot about Brilliant Basics. We've made significant strides in the fundamentals, and our core foundations are solid. Our app launch speeds in our key markets are all podium-worthy, thanks to a complete overhaul of both our web and native apps. As you've heard from BetMGM, our US app navigation is now up over 40% faster. However, we're not done yet. Our best app launch speeds are yet to come. Just wait a little bit longer. Instant withdrawals are now live, with deposits and payouts happening in seconds.
Over 90% of the withdrawals now occur under 60 seconds, significantly improving the user experience and boosting recycling. Logins are faster too. Our internal goal is to get 90% of our logins in under two seconds. We're almost there in the U.S. We have a bit more work to do in other markets. Later this year, we plan to launch Passkeys that will push us even closer to our targets. App scale and stability are also key expectations of customers, and we're getting better. We're on average seeing over 2 billion spins per week on the central platform. That's nearly 2,000 per second. Our sportsbook product has made significant strides, closing the gap to as narrow as it's ever been. Our customers are clearly enjoying the product. In Q2, for example, our pre-match bet builder has seen a year on year turnover increase of 80%.
Together with Angstrom and BetMGM, we've just launched live single-game parlay in baseball and are set to introduce in-play SGP for NFL and NBA when their seasons start. Not only are we upgrading player experiences, we're also modernizing our trading back office, bringing all the existing capabilities of our European football trading to our US sports, further improving risk tools and automating price movements for our traders. Speaking of European football, our in-play football bet builder is rolling out this week for the upcoming season. We have improved our market depth and improved our bet tracking capabilities. In 2026, we can now pivot from catching up to going beyond. On the gaming side, we continue to have the best-in-class gaming offer and content library. So far this year, we've been releasing 150 games each month, 20% of which are early access or exclusives.
Almost 12,000 unique games have been played in H1. That's 27% up on 2024. In the U.K., we've been expanding our coin economy with Gala Coins, Ladbrokes, Coral Coins, and now Foxy Dollars. We've had over 40 billion coins redeemed so far. Looking ahead to the U.S., we'll soon see new experiences like our Rewards Hub, Plinko, and even American football-themed games. Beyond online sports and games, we continue to make omnichannel improvements. For example, at BetMGM, digital verification. Think about it as selfies during registration go live in MGM Resorts casinos in Nevada very, very soon. I'm not obviously going to list everything we've done, and for obvious reasons, I'm not going to call out everything that's coming out, but it should be clear. We've achieved a lot, but there's still a lot more to come. Now let's move to the work we've been doing behind the scenes.
One of my first priorities when I joined was reorganizing the product and tech teams. Our setup was too complex. Our structure was stifling our ability to execute. Our top-to-bottom reorg now unlocks faster innovation and sharper improvements. More recently, we've added squads that are dedicated to a market, and some of these squads will actually be based locally in markets, giving us the edge to compete locally with real differentiation. It's great to see these dedicated teams working side by side with our commercial colleagues, embracing the learning culture that Stella mentioned earlier, taking winning ideas from one market to another. This mindset really does elevate the impact these cross-functional teams can have. As mentioned, our front-end stack is now almost fully modernized, powered by a platform-first approach using APIs, and it's really driving velocity.
For example, in July, we made over 1,000 code improvements that are already going live, and that's just for our front ends. You know you've done something well when Google wants to showcase your front-end architecture. AI is getting embedded across all of our engineering teams. It's speeding up modernization, and it's powering new capabilities. It's really fascinating to see our teams working alongside AI agents, delivering automated system upgrades and product improvements. We've got lots of exciting things coming down the pipeline. The real difference now is that we're operating at a much higher clock speed. Okay, so now let's talk about the direction we're taking with the central platform. First, let's just take a step back and acknowledge we have multiple platforms, and they all have a role to play. They give us a local edge where we have them.
We will continue to embrace those platforms and support them with central capabilities wherever we can. As for the central platform, the capabilities are getting better, as we had planned. We don't want to just compete. We want to win, and we want to lead. To do that, from where we are today, we must get four things absolutely right. They are the pillars of the system that's going to be built to win globally and locally today and in the future. First, localization at scale. As we've already said, our central platforms deliver the brilliant basics, the foundations that every market needs to win. Local squads bring that local edge. Together, we combine the power with local precision. Here's the magic. We do it all on a single code base. Next up is our modular capabilities.
We built our platform around four independent pillars: gaming, sports betting, marketing, and player accounts. Each one can evolve on its own without waiting for the others. With clean APIs, our front ends can be detached entirely. This means B2B flexibility, white labeling, and even cloning the platform for strategic expansion. This is the architecture that both unlocks velocity and creates future optionality. Third is real-time intelligence. We're embedding telemetry into everything. In this industry, the winners are those that can personalize and optimize near real-time. Every feature, every campaign, every decision is driven by real-time data and real insights. Finally, compliance. It's not the most glamorous topic, but it's mission-critical, and it's a strategic weapon if we treat it right. We're making compliance a first-class system, not something bolted on, not something coded from scratch every time a regulation drops.
Instead, it's compliance by configuration, where changes take days or weeks, not months. Putting it all together is where it gets really exciting. On the right of the page, you'll see our evolution. Today, every market on the central platform benefits from everything we build in real-time. To complement our central capabilities, we now have scalable ways of working that can build local differentiation, which every market can also use when needed. The next horizon for modernization is our API-driven central platform. This gives us optionality, the ability to decouple where it makes sense. It's a journey, and we're making some real strides. With every step, we're building a platform that's more agile, more scalable, and more aligned with the needs of our markets. That is exactly where I want us to be. To summarize, our products are getting better. Our customers are telling us that.
We are well organized to execute locally. The results are showing that. Next, we are modernizing our platform to give us optionality for strategic choices. Back to you, Stella.
Thank you, Satty. Let me briefly wrap up the formal part of this presentation. Entain is a great business with attractive portfolios in a long-term growth sector. We have clear and straightforward strategic priorities, and they are now delivering results. Our customer experience is improving, and we're generating better net revenue retention. BetMGM is entering an exciting new phase and should soon start returning significant value to both parents. Our journey on tech and product is giving us more flexibility and optionality. NGR and EBITDA are firmly back to growth, and we have a clear pathway to strong annual cash generation. I believe these are exciting times for Entain, and I'm excited to be working with the team to deliver the next phase. Thank you for listening to the formal part of the presentation. In a few moments, I am going to open this up to questions and answers.
Before I do, I want to actually answer one question up front, and that is to answer a question which I know is going to be asked, and that is about OSTRAC. I'm sure some of you will have already noticed that there is a provision of approximately GBP 50 million in our accounts. That provision is purely accounting-driven, and there is no certainty that the quantum reflects what might be a potential penalty. We are currently in early-stage mediation, and there is no further update until those discussions have concluded. Now I've answered that question, I'd like to open the floor to other questions from the audience.
Thank you, Stella. Use your format, name and number, and can I ask you to limit yourself to two because I'm sure you're sneaking a part B?
Hi, it's Ben Shelley here from UBS. I've got two questions. One, 7% online growth is near the top end of your medium-term revenue guide. How do you feel about sustaining this into 2026, and can you walk us through the key puts and takes? My other question is about the marketing reinvestment. Did you look at the business and think there is an incremental revenue opportunity here? Are you a bit of upside, or do you think it's more about sort of maintaining sort of the current revenue growth?
Thank you for the questions. Is that working? Okay. Why don't you talk about 7%, and I'll talk about marketing? Yeah?
Sure.
Yeah.
I think he's passed me a mic.
Oh, sorry.
It's all right.
I'm very cheap here.
Yeah, 7%. We estimate that our markets will grow in a range of 5%- 8%. Let's use your 7% number over the medium term. We see opportunities to outperform market growth potentially in the U.K. as we're still recovering market share, and we'll see just how far that takes us. We think by the end of this year, we might be fully recovered on gaming, but sport will take longer. We think Spain is an opportunity to grow faster than the market. We have opportunities in New Zealand, which is particularly exciting. Not quite market share gain, that's a slightly different dynamic, but powering us to outsize market growth. Perhaps more neutrally, Italy and Australia are more in line. I don't know if anyone can hear the mic. It feels like it's gone off. Okay, keep going.
The only place where we're losing a little bit of market share at the moment is Poland, where it's very competitive. Other operators are sacrificing profits, essentially, and our market share is under pressure at the moment. Otherwise, we're either in line or planning to grow ahead. If that gives a feel for if the market's 5%- 8%, you know, 7% is not a bad number for ourselves.
Thank you, Rob. You wanted to have a little chat about marketing, one of my favorite subjects. Learning about marketing investment in a business like this is very interesting because we have very strong data now that says that we get very good paybacks from our performance marketing, for example. I think I showed some of that on the charts earlier. Getting paybacks, some of which are within a year for certain activities, is really strong, months of paybacks. I'm confident that increasing the investment will fuel growth. I'm not going to get ahead of my boots because if we get ahead of our boots and we have to do a reset, you're not going to thank me for saying we're going to go for additional growth before we've started to establish it. It's a little bit of feed and see what happens concept.
The performances this year have proved that there are really good reasons for continuing that momentum. We're in a different part of our journey. When we were talking about probably 2022, 2023, when the numbers weren't looking so compelling and there was been pulling back on marketing, we're in a position now where we have a higher degree of confidence in investing in that future while still not compromising the delivery on the results.
Thanks. Ed Young from Morgan Stanley. First question on tax. There's been prominent media speculation around tax. I wondered if you could share your thoughts for how you think about tax risk in the UK. The second is on your GBP 500 million cash generation target. If we do add back the DPA and add BetMGM, you don't need, frankly, very much organic growth to get to that GBP 500 million number. Stella, I wondered if you could think about or outline your thoughts for how you think about the priority for driving better underlying cash generation within the business as it stands versus the three levers you've outlined on that slide. Thank you.
Thank you very much, Ed. First of all, on tax in the U.K., I think we shouldn't forget we're a great British company who generates huge amounts of tax for the government. We were a top 20 taxpayer anyway, and I think we should be proud of the success that this company generates, not only here in the U.K., but in many other markets. That's point one. I think point two on the conversation about tax hikes, which have been mooted, people should be very cautious about the law of unintended consequences. There is already a large black market in the U.K., and driving up tax rates has the potential of reducing the tax take because people go to the black market. It is very easy access. There are very few controls that are in place to stop that right now.
There are examples in other markets, just take the Netherlands, when the tax rate went up significantly in January 2025. They have already admitted, the chair of the regulator there, that it has had basically an own goal. It hasn't worked. I think people should look at the maths and be very careful about where we go forward because we want to protect players. If players go to the black market, they have no protections. They may not even have a guarantee of getting their winnings out. It's about being balanced and doing the right thing. Remember, we have 14,000 people in the UK. We've got a very large presence on the High Street. Protecting the High Street is also very important. Whatever happens, we manage and we go forward. I do think looking at the consequences in the round is very, very key.
I'm going to hand over to Rob because he may have some more comments on the tax side, and I'll also let him talk to the easiness of getting to GBP 500 million of cash generation or not.
Thanks, Stella. I think you answered it really well. You shared all my views on tax. Maybe a couple of things that I would add. Our tax contribution of over GBP 500 million to the UK government is growing. It's growing organically, and that's a really important point. I also think it's reassuring that despite everything that you read, the Treasury do understand the concept of the black market. They do understand that tax take goes to zero as customers migrate across, and obviously consumer protection falls away. What's also important is that they understand that we're one business in UK online. It doesn't matter which tax rate goes up, whether it's gaming or sports or both. Either way, the mitigation, the consequences are the same. Therefore, the black market issue is exactly the same regardless. I think it's well understood. The Netherlands example is well understood as well.
We'll continue to encourage government and the Gambling Commission to really focus on the black market. Allow the regulated market to continue growing and then generate a tax boost by clamping down on the black market. That would be our advice on how to proceed. In terms of cash generation, I think it's three fairly even components to get from zero in 2025 up to over GBP 500 million in 2028. The good news is the BetMGM component. I think people feel a lot better about that now after a really strong first half of the year and inflecting into profitability. We're comfortable on that side. In terms of the (exc. US) business, I concur with your comment that it's fairly routine growth to help us get to GBP 500 million. Of course, we're targeting over GBP 500 million. As always, you need to, in our sector, make room for some risks and opportunities.
I think we have great opportunities in the space of iGaming legislation. I mentioned it earlier, but New Zealand has now passed a bill, or at least a bill has been introduced, which is fantastic, aiming for a 2026 launch. Poland's potentially pushed out now with the result of the presidential election going the other way, but the underlying opportunity is still there. Obviously, U.S. states, you know, so potential for iGaming legislation, I think, is a real catalyst over and above those numbers. Perhaps going the other way, there's always risks around taxes that you have to have some provision or contingency against in your numbers.
Sorry, Rob. I'm going to go to the lines because you had the mic.
I'll give it back.
Okay. Question from Adrien de Saint Hilaire from Bank of America on FX and net debt. Could you please give us an indication as to how much FX headwind is in your 2025 EBITDA guidance? The second one, share how you see the net debt for the year, given all the various moving parts on cash flow.
Definitely questions for you, Rob. Okay.
Yeah, let me have a go at that. FX, if you look at currency movements, you'll see that the first half of the year has an outsized drag. We saw earlier that the first half of the year, the P&L was impacted by $29 million. Perhaps across the full year, more like $40 million, something like that. I mentioned earlier, 2%- 3% on revenue, but that doesn't drop straight through at EBITDA margin level. You get a benefit because some costs also benefit from the FX movement. Let's call it $40 million across the full year, that order of magnitude. In terms of net debt, broadly level with where we are today. I mentioned that during the prepared remarks, we expected 2025 to be neutral from an adjusted cash perspective.
We got a little bit of a lead in H1, so that will go a little bit backwards over the second half of the year. There are then some lumpy items that's not in adjusted cash flow. Firstly, dividends. Remember that that definition is pre-dividends. Secondly, we have the payments to the New Zealand government associated with the legislative net. Nothing new, all in our guidance. You'll see it there in our guidance slide, but that comes in the second half of the year. Therefore, if anything, net debt is slightly higher, but leverage should be broadly around the same level as where it is at the half year. We start to deliver from 2026 onwards through EBITDA growth in the (exc. US) business plus improved cash coming from BetMGM. Cash generation plus EBITDA growth equals much more rapid deleveraging from 2026 onwards.
Thank you. Good morning. Ivor Jones from Peel Hunt. Could you kindly follow on the discussion about the cash flow from BetMGM to Entain? What's the process? Does there need to be a particular set of accounts, a particular board meeting? Could payments be monthly? Is that obviously not the case? Are you contemplating putting debt into BetMGM in order to accelerate the extraction of cash up to the group to pay down the debt grid? What will we learn and when about the likely trajectory of that? Satty, you said in tech speak that you were enabling the platform for white labels and clone for expansion. Could that be translated for the lowest common denominator? What's the strategic point of that? It sounded important, but I didn't understand it. Thank you.
I'm going to hand over in a minute to Satty and to Rob. I think one of the things I just want to say about BetMGM is that we're very aligned in the way that we operate between MGM Resorts and ourselves. That's really useful in terms of working out how we distribute the wealth from the asset going forward. I'll let Rob go through the numbers. I think the key point on tech, we want better optionalities for the future. We don't want to have our hands tied behind our back that we can't make a decision for the future that would be good for a particular part of the business. White label we're probably not going to do, but it's just saying we could.
That was just an example of the flexibility that we want to put into our systems in the future, as well as improving the player experiences, etc. Let me hand over to Rob and then on to Satty.
Thank you, Stella. BetMGM getting receipts back into Entain's parents for the first time this year, which is really exciting for us. The short answer is nothing's actually been agreed yet. Over the course of the remainder of the year, we'll work it out with Gary Deutsch. I know that both, when I speak to Jonathan Halkyard, he's the CFO for MGM Resorts, we're both aligned that leaving cash in the joint venture at year end doesn't make sense. There will be some cash distribution up to give a feel for it. We came into the year with a good amount of cash on the balance sheets. We will probably want to leave a reasonable amount of cash on the balance sheet at year end as well, in order to allow for working capital cycles and so on.
Therefore, have a look at cash generation in year, and that's probably as good a guide as anything. You heard from Gary a couple of weeks ago where we are with CapEx. If you take EBITDA, deduct CapEx, you're not going to be too far wrong. Divide it by two, convert to sterling, and away you go. I think that's as good a direction as any. You had a question on raising debt at the BetMGM level. There's nothing in plans at the moment, definitely nothing this year, but it is an option for us in the future. I'm sure we'll get together at some point, perhaps in 2026, to have that discussion, but nothing in the pipeline.
Satty?
I'll try and be as tech-free as I can in my response, but ultimately, I think Stella answered it well, which is we're trying to design our technology and our people supporting each of our tech components to be able to run independently. That could mean within Entain, that could mean outside of Entain. We're just making that a technical possibility. As and when the options, you know, when the moment is right, we can choose to exercise that option. For now, it's really about putting the underpinnings in place.
It's Monique Pollard here from Citi. I had a couple of questions, if I can. The first one, Rob, was just on the cash flow. What I'm trying to understand is that the adjusted cash flow was GBP 80 million in the first half. You're saying broadly neutral for this full year. Should we think about therefore a cash outflow in the second half? Why would that be, given, as you said, it excludes things like the payment to New Zealand and the dividends, etc.? Just trying to understand sort of what the seasonality would be there that would lead to that. Secondly, just wondering if we could dig in a little bit more to what's going on in Poland, because obviously the CE results, Poland up 2% in the first half versus Croatia up 14%.
Obviously, part of that is the fact that Poland is just sports and you're lapping the Euros, but Poland did grow slower than the CE sports. You mentioned that you're losing a bit of share in Poland. If you could just outline to us a bit more what's going on in the competitive environment there and plans going forward, that'd be great.
Thank you for that. I'll give Poland a go, and then Rob will definitely give cash flow a go. Poland is a long-term attractive market, but it has been highly competitive in recent times in advance of people anticipating the liberalization of casino. There has been a lot of very heavy bonusing, people paying for tax on winnings, which has meant that, yes, it has been a challenging period, but we've got to get the balance right, because if you just do a race to the bottom and do the cheapest deal that you possibly can to compete extremely aggressively in the short term, you end up not having a success in the long term. It's about getting that balance, and it has slowed down growth that we were enjoying in Poland.
What happens going forward now that liberalization of casino has, you know, gone back a while will be interesting to see. We've got to get the balance right between maintaining our leading position and also making sure that we're ready for when liberalization of casino actually happens. It's a bit like Rob said earlier. We can have ups and downs in the portfolio. It's a market that's very competitive right now, but you balance that off with great growth coming through from other markets that are now getting substance and scale. That's the benefit of having a global portfolio that we're talking about. Hopefully that answers the question, but I'm going to hand over to Rob for cash.
Maybe I can just add one little thing on Poland. Sometimes you have to decide between top line and EBITDA. We're actually growing EBITDA year on year in Poland. I saw a fascinating chart that shows if you look at net profit by operator in Poland, there's still only two operators making money. We're number one by some distance. We have 70%- 80% of the EBITDA of the market, and it's growing. The number two is making money, but it's declining, and everybody else is break-even or loss-making. There's a degree of making sure that the profitability continues into the future as well. Onto cash flow, really the main answer is EBITDA. As I mentioned when I was presenting, we do expect if you follow the guidance at the midpoint, that implies a GBP 40 million reduction in EBITDA compared to H1, and that's primarily marketing.
It's partly just seasonality phasing and then partly the decision to invest a little bit more in the second half of the year. There's nothing else that really jumps off the page. It's most likely EBITDA.
The EBITDA change is only GBP 40 million, as you said, and you've got GBP 80 million of positive cash flow.
I like to hit our numbers, Monique.
All right, thank you.
He's very conservative, in a good way, in a good way.
Hi, Estelle Weingrod from JPMorgan. I just have one first question on the sports wagers in the UK. It was + 9%, which is quite strong in the context of the Euros comps. Would you be able to give that number for the underlying and handle growth when adjusting for the leveling of regulatory restrictions and the Euros? I'm not sure you have this number. A second question on international gaming in particular. It was relatively weaker, both within online and retail. For international gaming, is it just the Netherlands and Belgium, or is there any other market which is dragging a little bit on this performance? Thank you.
Thank you for the question. We're just trying to work out what our answer is in a good way.
Yeah, I'll have a go.
Yeah, go.
I'll have a go. UK sports, I think the question is, can we, the volumes were good. UK sports wagering was good in Q2 as well, despite the euros. You're quite right. Can we unpick the regulatory impacts? Really hard to do.
Internally, I've said it before, there's no doubt that the number one driver of the acceleration in UK online growth is the voluntary code, right? Simplifying play journeys is also key, but that's also doing a disservice to Satty. He's looking at me. You know, we introduced new bet builder, for example. Product is improving, the app speeds are improving. If you look at our ranking on our App Store rankings, they're going up. Product is improving. Also, marketing is improving, and that's both brand marketing and performance marketing, as you heard from Stella. Performance marketing showing encouraging paybacks has enabled us to invest more as well, which in turn benefits the top line. It's really hard to break out the regulatory impact, but know that the growth is coming from a number of different drivers. In international gaming, I think Q2 was similar to Q1.
Yes, Netherlands and Belgium are the two material negatives. Otherwise, there's no particular noise. I think of our other markets, Croatia, Georgia, in international growing strongly, double digits in gaming as well. I don't think there's anything particular there to call out.
Thank you.
Okay, to me. I'm just going to continue on Netherlands. A question of just a bit more detail on the performance in Netherlands and your expectation for the rest of the year, given you start lapping later in the year.
It's a question about, sorry, I didn't quite hear it properly. Question about performance in Netherlands, more detail.
Yes.
Yep. I think, you know, the Netherlands has been a very challenging market with a huge impact of regulation and taxation increases. In terms of our performance versus our expectation, actually, if anything, we're ahead of where we thought we would be. We will start lapping some of the more negative parts of the impacts that we've seen relatively soon. I think it's going to normalize itself out quite quickly in the Netherlands. I don't think there's an awful lot of new news to share on that one. Was there more to that question?
No,
okay. Do you want to add anything to that or?
Yeah, just a couple of points, partly because I thought of another answer to Stella's question earlier. Just in Brazil, for awareness, sports is faring better than gaming at the moment. We think that's market-wise. Things like gaming certification are taking longer to come through. Gaming is lower than sports in Brazil. That's partly an answer to that question. The only other thing I'd add on Netherlands is whilst revenue is under pressure, exactly as Stella said, it's in line with expectations. It's down about 30% in the first half, not quite as bad as some of the other operators have reported. We annualize from October, so we'll see how it steadies out thereafter. Importantly, because of marketing restrictions, EBITDA is actually up year on year in the half in the Netherlands. Important to get that point in as well.
Hi, it's Conroy Gaynor here from Bloomberg Intelligence. Two from me, please. The first one just on the UK, gaming resale. Any reason, anything to call out there, or any reason why that same trend of being slightly down would or wouldn't continue in 2H? The second one on the marketing. I mean, clearly you've got different markets at different stages of the maturity curve, different regulations. Where might you be allocating or looking to allocate most of that marketing spend?
I think I'll take the marketing one because I like taking marketing questions. I'm going to give the UK retail to Rob because Rob used to run retail in the UK back in the day. On marketing, the key thing is looking at where the best returns come from our marketing investment. We're building a better muscle internally than we used to have. We have the benefit of our team, the 365 Scores team, who are amazing at what they do. They look at it incredibly mathematically in terms of the return that we get for the investment, and that helps us allocate funds across markets in an ever-increasingly intelligent way. That is point one.
Looking at different markets in terms of their maturity curve, it's always a balance between getting the right level of investment to sustain a big market versus the returns you might get for growing a new market. It is quite dynamic. I think the key point is we've got to be constantly learning about how best to deploy those marketing funds. I don't think you ever come to an end point on that journey. You know, quality of creative varies. The quality of the payback varies depending on where you're putting your performance marketing, the type of performance marketing, et cetera. I think we also need to look at our relativity to the competition in each market to make sure that we have an adequate share of voice.
I think it's a really big question, and it's one that we are looking at all the time to optimize what is one of our biggest lines of discretionary spend. I think where we're different to where we were maybe 12, 18 months ago, we have a lot more data to support the investments that we're making. That's in no small part down to the insights and analytics that come back from our 365 Scores team. Take Spain as an example. Spain was in terrible decline for us for a long while. The bwin brand had been large, and it went down to a much lower level. In combination, we put in a new management team there. They started to unlock the opportunities of having a legacy brand that needed some more love and attention, and then you see the kind of growth that comes there.
Now, 12 months ago, we wouldn't be saying put a lot of marketing behind Spain. Now it feels exactly the right thing to do because we're getting the payback. I think my long answer is it's something that is a really important component that we need to be learning constantly about. Back to the UK retail, Rob, would you want to have a go at that?
Yep, thank you, Stella. Firstly, just to level set, we're happy with the performance of UK retail. If you look at like-for-like gaming numbers, - 4% in Q1, - 2% in Q2, and improving. Why is it negative at all? There is a little bit around AGCs that we flagged in the past, and I'm pleased to see that the Gambling Commission is now taking a much closer look at AGCs, rightly so. I think the most important point is, you know, we first started seeing some sluggish numbers in UK retail gaming in Q3 of last year. That coincided exactly with the acceleration in online. You know, we're an omnichannel business. If you look at the aggregate gaming performance in H1 just gone, it was up 11% in the UK in H1, but H2 was + 5% of last year.
In other words, we've accelerated our gaming numbers into the first half of the year in aggregate. We're pleased with how the business is going. If you look at EBITDA, retail is flat. It's continuing to be stable and contribute to online growth, as I mentioned. It's also a pleasurable business for us to run. The management team do a fantastic job. We recently had an employee engagement survey. The UK retail scores have never been better. Turnover has never been lower. Massive credit to Joe and the team for what they're achieving. Retail for us is a really valuable asset, and it's stable, and it's contributing to online growth as well.
Okay, while we're switching the mic over there, one for me, quick one. Update on the N10 CE put option.
Thank you for that question. That was the put option that may or may not get used. First of all, I think the CEE business is doing really, really well for us. It's a long-term asset that I think has generated a huge amount of value. I think we need to look at it in the context of that. The choices that may or may not be exercised in the future by ourselves or by the other owners of the N10, the CEE business. I'm going to hand over to Rob just to give you the technical answer to the question.
I think our technical answer of no update is the right answer. There's no update, but just as Stella said, we're all very happy holders of that asset. Just in case Emma Capital and Matthias and his family do want to exercise the put, we have made sure that we've got some bridge financing in place. If we needed to debt finance, that facility is now secured, or we could find another buyer for the minority, all options available. The answer is there's no progress, and we're all happy holders.
I'll Jack Cummings at Berenberg. Just one for me, please. The UK online EBITDA margin in the half one was pretty strong, and I think it's even comparing to 2022. It's now up about 200 basis points. How should we think about the steady state margin for that UK business, absent obviously any changes to things like taxation? Is a high 20s achievable? Is low 30s? Can you give us any color there? Thank you.
I'm going to hand this one over to Rob because I haven't got my hand scraped. There you go.
Thank you. We spoke about it a little bit in March because the UK 2024 online margin was lower. I think I said at the time that the best way to improve it is through NGR growth. We just posted 21% in the half, so EBITDA margin is recovering strongly. I would just caution that we should wait to look at the full year numbers, partly because that evens out the marketing seasonality point and partly also because you have things like some of our cost items like staff bonus can be lumpy. Let's wait and see how the full year EBITDA margin looks and then judge. The key point is top line is growing well, and that inevitably leads to strong margin accretion.
Maybe I'll just add a little bit of color as well, which is we have four great brands in the UK online. We have Ladbrokes, we have Coral, we have Foxy, we have Gala. The work that's being done by the UK commercial team and Satty's product and tech team is really starting to show benefits, which should help us continue to grow in the UK. Things like the reward systems, the coins, or the Ladbrokes, all of those things in combination with better player experiences is part of the reason that we're very pro-investing in the UK. Obviously, tax increases are a challenge that may or may not come along. We have got some latent, very strong brands in the UK. We talked about sleeping giants that we wanted to reinvigorate.
We think there's a great opportunity to really connect with customers in a way that will continue that growth.
Final question from Pravin. In the interest of time, we'll wrap up.
Hi, hello. I'm Pravin Gondhale from Barclays. Thanks for taking my questions. Firstly, on Brazil, the black market there continues to be sort of bigger. In the longer term, how do you think how much of that black market will compare to the legalized market, and how much of that current existing black market you can successfully shift to the regulated market? Secondly, earlier you mentioned that most of your key markets are now on a centralized platform. Are there any other sort of opportunities or markets you are looking at where you can move the legacy platform, the brands to decentralized markets, helping you with the margins there as well?
Okay, I think we can have a little bit of a team effort here on some of this. I'll answer a little bit and then I'll pass it on to my colleagues. Brazil, the black market, I think was the first part of your question. It's very volatile in Brazil at the moment because regulation has only just come in. How big the black market ends up being, I think, is still to be determined depending on how many taxes the government put in place. They've increased taxes going forward into the autumn. What the restrictions might be on marketing investments in the future, I'm just saying there's a lot of volatility. That means that we have to be agile in our approach to the market to make sure we navigate the right line.
It comes back to being a learning organization at the end of the day, constantly taking in the data and moving forward. It could end up being a big number, but we don't know what restrictions maybe the government will put in place regarding closing down websites, et cetera. I'll let my colleagues comment on that in a little bit more detail. In terms of the central platform, we haven't actually moved the markets to the central platform. The central platform, I think the key point that we were making, and I think Satty and Rob were making, is that we were in triage this time last year and earlier when the markets that were on the central platform were showing significant decline.
I think the key points of comfort is that markets like the UK, Spain, Canada, Austria, Greece, et cetera, are on the central platform and are now posting very healthy growth, which is an indication that the central platform is a lot more healthy than it was before. It's not to say that the regional platforms, which are efficient platforms, they're good cost base and are adding lots of local value. There's no objective to try and close those platforms down. They add versatility. They add choices. If we want to acquire or dispose of an asset, it makes it easier to do. I think the key point is the central platform is driving growth. I forgot to mention one very important market where we're driving growth on the central platform, which is BetMGM.
The scale of those numbers means that we've got much more, we're building much more optionality into the system. I'm going to pass it on to Rob and Satty for any more comments on either question.
Nothing really to add on black market. It's just wait and see until we get some proper measurement. The only extra comment I would say on localized platforms, the only part that we don't own is still BetCity, and that's due to migrate in-house in 2026. Otherwise, all the other local platforms are wholly owned, they're localized, they're low cost, and they're powering a lot of number one positions. They're working. You know, we're number one in the Baltics, we're number one in Poland, number one in Croatia, number one in Georgia, number one in New Zealand. They're all on local platforms that are appropriate and working in those markets. Satty, anything to add?
No, I think I've taught you both very well. I think nothing to add.
Right, I think on that basis, we're going to wrap it up for the day. Really appreciate the questions. I know that quite a lot of investor meetings are going to be taking place over the next couple of weeks. Very happy to follow up with you. If you've got any really difficult questions, please give them to our IR. They're more than happy to take them. Apart from that, thank you so much for joining us. We really appreciate it and we look forward to speaking to you again soon. Thank you very much.