Good morning, and welcome to Entain's Quarter One Trading Update call. Please note this call is for analysts and investors. I will now pass to CEO Jette Nygaard-Andersen to open today's call. Thank you.
Thank you. Good morning, everyone. Thank you for dialing in today. As always, I'm joined by Rob Wood and the IR team. Following our usual format, I'll kick off this morning with a brief summary of our Q1 performance and our progress so far this year in delivering on our strategic objectives and ambitions. Rob will then discuss the Q1 trading in greater detail, and then we'll open the call to your questions. I'm pleased to say that this has been a strong start to 2023, in line with our expectations. Across the group, we continue to demonstrate ongoing momentum in the underlying business, while also making excellent strategic progress as a diversified global leader in recreational entertainment. Today's Q1 results are further evidence that we are successfully delivering on our strategy.
Q1 saw record highs on both online NGR, up 11%, and active customers, up 19%. Our retail shops continue to perform strongly with retail NGR up 13%. Group NGR, including our 50% share in BetMGM, also hit new highs, growing 17% year-on-year. Our headline growth numbers reflect the impact of some significant regulatory changes will improve some of our markets during the year that we've spoken about before. What I think clearly demonstrates the underlying momentum is the performance of our online business, excluding the known regulatory headwinds in the U.K. and Germany. This would have been 6% up in constant currency. Having focused, excuse me, our businesses exclusively on regulated markets, we should pass through these significant regulatory changes through the year. Our industry has very exciting and attractive dynamics.
It's both growing and expanding, providing new opportunities for us organically as well as through acquisition. Coupled with industry growth, the Entain platform is continuously evolving to ensure we can fully capture these opportunities by focusing on the customer and delivering recreational audiences a great offer and service. As we look forward and deliver further enhancements to our platform, I'm confident that Entain can deliver NGR growth ahead of our markets. Across the business, we continue to drive customer engagement, whether that be Super Bowl and March Madness in the U.S. or Cheltenham and Aintree in the U.K.. For example, in the U.K. Coral flooded the Cheltenham streets for this racing club campaign, which saw us grow club membership by over 15% during the festival. The racing club continues to grow, with sign-ups during the Grand National weekend, taking its total to over 110,000 members.
In the U.S., BetMGM continues to perform well as we focus on executing on our long-term profitable growth strategy. We retain our leadership in iGaming with 28% market share and our position as a top three operator of sports betting and iGaming across the U.S. In Q1, BetMGM delivered revenues of approximately $470 million, up 76%, demonstrating another successful quarter's performance that included Big Ten core events like Super Bowl and March Madness, ongoing product enhancements, new game launches, as well as three new market launches during the period. As you know, the Entain platform's MarTech and customer data analytics enables us to focus on NGR and profitable growth. We remain confident as we continue to grow NGR whilst optimizing our retention bonusing. I'm particularly pleased that our online sports NGR on a same state basis grew by approximately 100% year-on-year.
All key metrics, of customer economics, player retention, and cohort maturity continue to support our expectation to deliver positive EBITDA in the second half of this year. We continue to work with the BetMGM team to further improve the offer and drive further engagement, and we are confident in our plans for this year and our ambitions of a 20%-25% share in this exciting market. During the quarter, we also made further progress on our execution of strategic growth opportunities with further diversification and expansion across regulated markets and products. M&A remains a core driver of our strategy with our most recent acquisition of 365Scores, an exciting addition to the group. It brings interestingly live score data and sports content to the Entain platform, providing our broader customer base with more data and content.
You may remember I spoke about opportunities of opening up the funnel for direct customer engagement. This acquisition sits squarely in that strategy. The team in Australia did a fantastic job in getting us selected as strategic partner by TAB New Zealand. There are some New Zealand government approvals still to be confirmed. This partnership opens up an exciting opportunity, securing access to an attractive regulated growth market. We can see significant opportunities to grow the business alongside our operations in Australia. We'll share more detail around TAB New Zealand and 365Scores opportunities later in the year. As always, our commitment to sustainability remains core to our strategy. As we already announced in January, we set a new benchmark for our industry by being the only major global operator to exclusively operate in domestically regulated and regulating markets.
We are delighted to have continued our six-year partnership with the Gordon Moody Charity, with our latest funding commitment for a two-year project providing responsible gaming support. Third-party ratings awards continue to attest that Entain is setting the pace for sustainability and player safety for our industry and across the ESG landscape. In summary for me, we have started 2023 strongly, making great progress operationally and strategically. The ongoing strong momentum continues to be visible across the group, with Entain's unique platform capabilities driving underlying growth across our markets, brands and products. Our growth and sustainability strategy sees us focused on the customer, broadening our appeal and expanding across regulated market audiences. Q1's record group NGR, record online NGR, and record online active customers are the further evidence that we are delivering on our strategy, delivering high quality and sustainable earnings.
Alongside this growth, we continue to enhance our structures and processes to ensure our business is aligned to fully embrace our competitive advantages and capture exciting opportunities in the future. On that note, I'll pass to Rob for more details on Q1 trading performance.
Thanks, Jette, good morning, everyone. As Jette has already mentioned, we started the year strongly, and our business continues to perform in line with expectations. Continuing strong momentum saw us deliver another all-time record for NGR in Q1, both for the group and for our online business. On a reported basis, Q1 group NGR was up 15% or up 22%, including our half of BetMGM. On a constant currency basis, Q1 NGR was up 11% and up 17%, including BetMGM. Let me give a little more color on our performances across the group, I'll reference constant currency numbers throughout now. Starting with Online ex- US, Q1 NGR growth was up 11%, in line with expectations. On a pro forma basis, Online ex- US NGR was up 1% for Q1.
If we strip out the headwinds we've previously discussed in the U.K. and Germany, that 1% pro forma growth becomes approximately 6%. Looking more closely by geography, in the U.K., NGR was down low single digits year-on-year, reflecting the ongoing absorption of affordability measures. As I discussed at the full year, we estimated that U.K. affordability measures were around a 10 percentage point headwind to 2022 performance in the U.K., and that we expect affordability headwinds to continue into 2023, but diminishing as the year progresses. Therefore, being down low single digits in Q1 implies the underlying UK business was otherwise in growth. This underlying growth in the UK business is particularly evident when looking at actives, which were up very strongly by over 20% in Q1 as we engage with more and more customers and continue to take market share.
Australia is performing as expected, continuing to take market share with slight growth in Q1 on tough comparatives and an easing underlying market. The quality of Ladbrokes and Neds product offering really differentiates ourselves from peers. The team continues to lead the charge on that front. Italy is growing very well in a strong market. Baltics are back into growth, now benefiting from softer comparatives. Brazil just delivered a record quarter of actives ahead of market regulation. Germany continues to be our most challenging market, with the ongoing lack of regulatory enforcement seeing us unable to rebuild yet. However, we remain hopeful that much-needed enforcement action will become more evident during 2023. Finally, the contribution from our recent acquisitions in Croatia and the Netherlands was in line with our expectations, adding 10 percentage points to our online growth.
As Jette mentioned, our total online business delivered another record for active players in Q1. Actives were higher versus Q4 and also up 19% year-on-year, or up 14% pro forma. Whilst our greater recreational shift has seen a lower spend per head year-on-year in Q1 as expected, spend per head has been broadly stable since Q2 of last year. A final couple of points to mention on online before I move on. Firstly, sports margin. Q1 was a little higher on a year-on-year basis at 13.5%, which reflects our increasingly recreational customer base, fixture results in the quarter, and also the addition of SuperSport, which is a higher margin business. Secondly, some of you will have noticed from the table in the RNS, the unusual delta between sports and iGaming growth in Q1 in our online business. There are a few drivers of this.
Firstly, the return to growth in the Baltics is gaming driven, and the decline in Germany is largely sport driven. The most notable point is the result of the acquisition of BetCity, which is primarily a gaming business. I would therefore expect a differential to continue through this year. On to retail, the excellent performance seen last year has continued into Q1, with the business seeing a strong start to 2023. Q1 NGR was up 13%, or up 9% pro forma for SuperSport. Growth was across all geographies and across both sports and gaming. Our best-in-class machines and revitalized in-store digital offerings are driving volumes, as well as engaging a younger customer demographic. Before I turn to BetMGM, let me comment briefly on our most recent deals, the acquisition of 365Scores and our exclusive partnership with TAB New Zealand.
We look forward to sharing more detail on financial contributions to 2024 and beyond in due course. Combined, we do not expect a contribution to EBITDA in 2023, in particular, while New Zealand TAB remains on legacy technology. Finally, to BetMGM, which continues to make excellent progress, delivering very strong growth and executing in line with our long-term profitable growth strategy. The business is on track to deliver guided revenue this year of between $1.8 billion and $2 billion. With our focus on NGR, we are continuing to grow whilst also improving our product and app experiences. I think it's worth me reiterating an important point earlier from Jette. Player economics continue to be extremely attractive, hence cohort profitability is coming through in line with our expectations. It's these player economics that are seeing us reach positive EBITDA in H2.
The business is growing extremely strongly, with revenue up 76% in Q1, and profitability is coming soon. Wrapping up, we continue to demonstrate ongoing momentum embedded across our underlying business with revenue growth of 17% across the group. Entain is the most geographically diversified and globally regulated operator in our industry. We continue to make excellent progress focusing on the customer, broadening our recreational audience, and outperforming our markets. Our underlying performance and momentum reinforces our view that over the medium term, Entain is a strong growth business with expanding EBITDA margins. Entain operates in growth markets today. We expect to grow ahead of those markets, and we expect further growth on top from both M&A and expansion into new markets as they regulate. With that, I'll hand the call over to our operator, who will open the lines for Q&A.
Sure. Thank you. As a reminder, if you would like to ask a question, please signal by pressing star one on your telephone keypad. We will take the first question from line Ed Young from Morgan Stanley. The line is open now. Please go ahead.
Good morning, thank you for taking my questions. My first one's on BetMGM. It was a very good NGR number in Q1. Frankly, it already makes the 23 guidance look a bit conservative. You referenced share though, yeah, should we see that 20-25% share target, which you're currently below as less relevant or even irrelevant given how you're talking about GGR and NGR? Or do you think that with the product improvements that could come later this year, the single wallet and around One Game Parlay will potentially mean that share, even on GGR terms, starts to come back up? The second question's on 365Scores. I was gonna ask you for contribution, but it sounds like you're not going to give it, so I'll hold that.
More broadly, can you talk about the strategic rationale behind that purchase? Should we think of this as an affiliate business? Is it something a bit different? More broadly, do you think the accumulation of some of the small deals you've done precludes doing something larger in terms of use of capital for M&A or returns to shareholders? My final question's on regulating markets. There is obviously one big market that is regulating in your regulated mix, which is Brazil. You've given commentary around Germany, and that business is clearly down sharply. Looks like it's over half, less than half of what it was pre-regulation. Just in that light, can you touch on the risks and the opportunities about Brazil?
There's clearly momentum to get something done there, but there's also noise around a potential iGaming switch off, potential player winnings tax, you know, questions over exactly what the effective tax rate will look like. Can you talk about some of the risks maybe in that business? If I looked at it the other way around, what do you see as the key elements you need to see from Brazil regulation for this not to be a sort of material headwind, whether it's in H2 or 2023 or into 2024? Thanks.
Thanks. Good morning, Ed. Yeah, let me kick off with these questions one by one. Let me start with BetMGM. As you say, you know, the business continues to perform strongly. We're really pleased with Q1, with NGR up 76%.
And NGR $470 million. That's really the key number, and I think you allude to that as well. We are on track to deliver guidance for the year, which we've set out at $1.8 billion-$2 billion, as well as becoming profitable in the second half of the year. We're not changing guidance by now, but very pleased with where we are. Another key number is, of course, that we are growing same state online sports betting by approximately 100%. That's another killer number for us when we look at the business. Where we are right now, very happy with the NGR numbers, very happy with the performance of the business.
When it comes to GGR market share and the medium-term target that we set out around 20%-25%, we're still happy with that. We're not changing it as it is. Our iGaming business is doing great. It's with a market share around 28% last three months to February. It's doing very strongly. We are super focused on our sports product continuing to grow that. I think the testament of growth in same state NGR is really pleasing. We continue to be laser focused on the sports product. As I said on our last call, I really see that as an enormous opportunity for us. In-play percent of handle is growing. Parlay is growing in terms of bet counts. Also, same game parlay is growing, there's more opportunity for us here.
As we look ahead of the year, we're excited to continue to improve our products on the sports side, and also looking to hopefully launch single account, single wallets later in the year. All opportunities for us, happy with the guidance we've set out in terms of medium-term GGR share of around 20%-25%, where we've said that probably you should look at iGaming in the top of that range and online sports betting in the lower end of that range. When it comes to 365Scores, that's a world-leading scores app, and I think there is an important distinction here from the broader segment of affiliate business. We acquired a large score apps business and a content business here.
It's a top 3 operator in Brazil. It's top 5 globally. It has a diversified audience across multiple regulated markets. scores app are really important vertical when it comes to sports betting. It's highly engaged audience. They are average sports fans, highly scalable business. It's very high convergence to real money gaming, it's an amazing data-driven business and with a very impressive team. That's also something that's important. It's an amazing addition to the Entain platform in terms of focusing on building superior data capabilities. Strategic rationale here is, and you heard me talk about this before, is how do we continue to engage our customers, especially on the broader recreational side? How to expand our offers to drive long-term value and lifetime value for the customer?
Also how do we improve the CAP and get on top of the funnel? 365Scores delivers on all these elements, and also supports our global growth opportunities. Very happy with that business. It's profitable as is, but in terms of more details on the business and the KPIs, that's something that we'll update you on later in the year. What does that mean for M&A? Well, listen, we take a flexible approach to our capital allocation. Every time we look at opportunities on how best to allocate capital and reevaluate all the opportunities, whether it's M&A or whether it's share buybacks. I don't see the acquisition of 365Scores to really impact that strategy as is.
We're still focused on both delivering on opportunities into new markets as they regulate on strategic opportunities, on organic opportunities, and then of course, look at the best way on allocating capital going forward. Finally, on Brazil, yeah, a lot have been going on in that market quite recently in terms of regulation. The government has now announced the key features, but we don't have all the information. Part of that is a betting duty of 15% of GGR, then adding to that corporate taxes. There has been talk about retaining the existing taxation that we see on lottery with the net profits of 30% of profits on winnings of 30% are net profits for winnings exceeding a certain amount.
We still need to see the details here and for those to be confirmed. We have one of the leading brands in the Brazilian market. We've been investing into this market for many, many years. Activities continue to grow. Key indicators really indicate that this is gonna be a very exciting market for us. Overall, we remain really excited about the Brazilian market. The team there is focused. We're entering into a number of new partnerships. Hopefully we'll have more clarity over the next couple of weeks, and we expect that regulation will be effective immediately, but then being rolled out either towards the end of the year or latest early 2024. In terms of iGaming, there's a parallel process here, we don't know yet.
iGaming in Brazil is small for us, so we don't expect to see any big impact. The real opportunity here for us is to get online sports betting regulated.
I'll stop here. That was a long answer. Hope that was helpful, Ed.
That was very helpful. Thanks for being so thorough.
Thank you. We will take the next question from line, Joseph McNamara from Citi. The line is open now, please go ahead.
Hi. Morning. Thanks very much for taking my questions. The first one, I was wondering if you could walk us through the growth, online growth, kind of exit rate of 8% constant currency in Q4, which had a few benefits from SuperSport and the World Cup, down to the pro forma growth you called out of 1% constant currency for Q1. Just anything I might be missing there in the bridge. And then the second one is on retail and I guess is there any reason why the momentum, the very strong momentum seen in that business shouldn't continue into Q2 and the rest of the year as consensus currently has flat growth for the year? Thank you.
Hi, good morning, Joe. I'll hand you over to Rob for those two questions. Rob, online growth exit rates Q4 bridge into Q1 pro forma and retail.
Very good. Morning, guys. The bridge from 8% in Q4 last year to 1% in Q1, you've touched on the key points. We called out the World Cup was about a 2-point contribution to Q4. We also called out SuperSport closing in November, was also about a 2 percentage point contribution. We also called out the strong margin in Q4. You might remember October 2021 was one of those shocker months for the industry. Q4 of 22 had some margin upside. You can bridge the gap across those three things. There was also some bits and pieces like a small contribution from Sports Interaction, for example, still in the numbers in Q4 and not in the pro forma.
Really, those first three that I mentioned, the World Cup, SuperSport, and March Madness bridges the gap. On to retail. Yes, very strong start to the year. I don't expect the level of growth that we saw in Q1 to continue across the rest of the year. There are a few watch-outs to point out. Firstly, the acquisition of SuperSport. We'll annualize that later in the year in November. Q4 growth logically therefore won't be as strong. Also Q1 was lapping against some residual COVID impacts in the prior year. For example, our Belgium estate was closed in January of 2022. Also even in the U.K., whilst we were fully open, there was still lingering staffing issues from Omicron.
You know, if you haven't got a workforce available, you can't open a shop, that sort of thing. Those are some of the main reasons why I would expect retail growth to cool now as the year progresses.
Excellent. Thank you. Can I just ask a quick follow-up on that last point? Is there any way you're able to give, I guess as you do sometimes with online, fill out retail growth number, the kind of 9% pro forma growth, what that would be kind of ex those one-off COVID effects maybe?
Yeah, look, I would hazard a guess, low single digit. We'd need to do a little bit more work. The Belgium estate is relatively small. As I say, the staffing issues were really back end of 2021 and early 2022. It's not gonna be a material impact. It would still be underlying growth, but it wouldn't be high single digit.
Excellent. Thank you very much.
Thank you. We will take the next question from line, Kiranjot Grewal from Bank of America. The line is open now, please.
Hey, guys. This is Kiranjot Grewal here. Just a couple of questions from me. Firstly, could you share some more color on your sports margin? What's been driving the strength in that? I know you said Q4 was a particularly strong one as well. It'd be interesting to hear more about that. Secondly, wages were slightly softer despite the M&A. Is it the U.K. and Germany the main driver behind that, or is there anything else we should be considering within that? Lastly, I think you mentioned that Baltics has started to cycle as of late Q1. Are you able to sort of give us a figure or outline how much of a help that should be for the rest of the year? Thank you.
Hi. Good morning, Kiranjot . All your questions are quite specific to our Q1 trading. Rob Wood, do you wanna take over?
Yes, happy to. Sports margin, we've seen it progressively tick up for the last few years. Really COVID was an accelerator of that as more recreational activity went online. We've also had our underlying strategy for a number of years now to really focus on the mass market recreational audience. Again, that has an impact. More recently, things like the U.K. affordability measures have logically driven a greater mix of recreational activity, which again supports margin growth. The recreational mix, I would say is the biggest driver of the ongoing increases. Adding SuperSport to the mix adds about 0.1, it's something, it's not large. Generally speaking, results were pretty decent in Q1.
We did have some poor football in February, particularly U.K. and Europe, across Champions League, Europa League, but all part of the normal diversification impact. Sporting results were reasonable in Q1. I don't think there's too much more to say on margin. On wages, you called out the two markets that are really driving the decline, Germany and U.K.. In the case of Germany, we will annualize against the cross-operator sports limits in the second half of the year, so that will be helpful. And as you've heard us talk about many times, if we can see some enforcement on the non-compliant operators, that really should be the catalyst for a return to growth.
With the U.K. very much driven by UK affordability measures, as we've spoken about, actives growth was superb and over 20% in the quarter. That's really showing that all the uplift that we saw in Q4 from the World Cup has been retained into the new year. That's a real positive. Until we annualize out the impact of UK affordability, I would expect UK wages to remain under pressure. Your last question was about the Baltics. The Baltics are what, 3% or 4% of our mix. A return to growth, let's say from -10 to +double digits, we would shoot for 20% of 3-4 points. That's really the weighted contribution that I would expect Baltics to add.
Georgia is another country for interest that saw some declines, particularly in the second half of last year, when it implemented a new regime in the first half of last year. That's back into growth. A similar story there. All supporting the return or the incremental sequential quarterly improvements that we expect in our online business as we progress through the year. Online, very much on track.
Super. Just going back to the first question, have you seen? Now that you've got more recreational, are you seeing a higher mix of your betting coming from parlay product, you know, ex-US in your core business?
Yes, it is. It is ticking up. As I say, I think that is more a reflection of the customer mix than particular product development. The answer to your question is yes, the multiples mix is ticking up all the time. Things like Bet Builder, as we call it in the U.K., or Same Game Parlay or Same Race Multi, wherever in the world you live, these things are getting better and more appealing to customers. That's helping. In my view, the primary driver is an increasing recreational mix.
Perfect. Thank you.
Thank you. We will take the next question from line, David Brohan from Goodbody. The line is open now, please go ahead.
Morning, guys. Thanks for taking my questions. Firstly on FX, it appears that there was a decent benefit in Q1. Just wondering if you could call out some of the big drivers of that. Secondly, on the U.S., you know, I think you delivered a very strong NGR performance despite maybe some concern around GGR share losses. Wondering if you could give any color on where your bonusing percentage landed in the quarter or how it has evolved since last year. Just finally in Australia, you know, anything you can add on how behavior of new competitors has evolved in recent months. Thank you.
Hey, good morning, David Brohan. Let me touch upon U.S. and Australia, and I'll hand you over to Rob Wood for the FX question. Just on the U.S., as we outlined on the update that the BetMGM team had in January, we've been implementing bonus optimization measures through most of 2022, and then of course into 2023, ensuring that we are rewarding and retaining the valuable customers here. All built on the internal data, analytics experience, MarTech and so forth, to focus on maximizing the player metrics here. And of course, this will inevitably impact the GGR share. We knew this upfront, but we are comfortable with this as we are growing NGR, as we said this morning, up 76% this quarter.
OSB same state growth, approximately 100%. Fantastic. We're also delivering greater margins, so NGR to handle. That grew significantly during 2022, so we're seeing the bonus share come down as well. Our actives are growing. Our player economics are very strong, as we said in the introduction this morning. More importantly, our cohort built in line with expectations, which is why we're on track to deliver profitability in the second half. I'm not gonna give you a specific number on the bonus percentages, but it is ticking down and it's supporting all our KPIs here and the business in terms of the profitability outlook. Very pleased with that. In terms of your question around Australia. Yeah.
In terms of the competitive situation there, I mean, Australia is a market that remains as competitive as ever, but we are really pleased with how the team is doing down there, and we continue to perform strongly. Slight positive growth there. And we expect that we are taking share, but still early days. We'll know more for sure, but we do expect that we are outgrowing the market. Specifically around competitors, there's been some noise around the new competitor Betr that entered in the second half. Our offerings here are very heavily promotion-led, rather than focused on product and quality.
They have faded some months in terms of their promotional pressure there. Still, you know, there is competition in that market and that will probably continue, but we're really pleased with how the team is doing, and we are focusing on product innovation, and it's really paying off. Rob, can I hand FX over to you, please?
Sure, yeah. No particular story. I mean, normally we have a smoothing diversification effect as various currencies, some perform well, some perform less well. In Q1 year-over-year, it's the case of pound sterling's performance. Therefore the currency variance is all in the same direction across all our currencies. To give you the specifics, euros is the main one, but also Australian dollars, Brazilian real, Georgian lari, all effectively moved in the same direction. That's what's created a wider than normal divergence between reported growth and constant currency growth.
Okay, perfect. Thanks, guys.
Thank you. We will take the next question from line, Joe Thomas from HSBC. The line is open now, please go ahead.
Good morning, Jette. Good morning, Rob. couple of questions, please. First thing, interested in the way you split out the online NGR. the sort of 6% pro forma versus kind of, versus the 1%, you know, including the regulatory impact. I just wonder at what point you think that the gap between those two will narrow. I mean, we've obviously got tailwinds potentially coming through in Germany, but headwinds coming through in Brazil, possibly elsewhere. I just wonder how long you think that gap is gonna last for.
Second thing is again, so with respect to sort of capital allocation and so on, there is one area that seems to be where regulatory progress does seem to be making, happening at the moment, in the world, which is India. You're notable there by your absence. I just wondered, from a headline view, why it is that you're not in India and what you might plan to do there.
Okay, thanks for your questions, good morning. Let me take the latter one on around India, then I'll hand you over to Rob for online NGR performance. Pro forma versus underlying. On India, you are right, this is a market that we are monitoring really carefully. The Indian government has taken some steps now towards national regulatory framework. Remember, it's been really state led up until now. There are some steps towards national regulatory framework coming in place for online gaming. They've assigned some ministers now to oversee some self-regulation and customer protection standards. It's very much focused on still, on skill base. There's also some things happening for e-sports regulation.
Right now, sports betting and iGaming falls outside the scope of these initiatives, but it's a market that we are super interested in for many reasons. Population, they love their sports and cricket and we have many people in the market, of course, that would love to see us launch there. We are laser-focused following regulation, but we haven't taken any steps yet. Rob, can I hand over online NGR pro forma versus underlying, please?
Sure. We absolutely expect the second half of the year to have that gap narrowed significantly. That really ties to our guidance. You know, if we start the year with 1% pro forma and that gap narrows and disappears by Q4 say, that would imply that we'd end the year at +6%. That really means across the full year, you can see that the guidance of low to mid-single digits, we're on track to deliver that. There is, of course, potential impact from the white paper, for example, which is not in guidance, but as we've talked about a lot, it seems likely that we won't see any material new impact from those. That's a positive. There are some other positive drivers as we progress through the year.
I've mentioned already things like the Baltics being back in growth, Georgia, being back in growth. The simple answer to your question is that gap should narrow as the year progresses, and one would hope that by Q4, you know, it's largely disappeared.
Thank you.
Thank you. As a reminder, if you would like to ask a question, please signal by pressing star one on your telephone keypad. We will take the next question from line, Jemma Permalloo from JP Morgan. The line is open now, please.
Hi, good morning, and thank you for the presentation. I think I've asked this question before, and I just wanted to checking on your plan for the outstanding Ladbrokes bond. I think you mentioned on the last call that you'll hope to address the maturity by summer. Is the plan to still use a combination of cash and then maybe refinance the market either for bonds or loans?
Thank you. Good morning, and thank you for your questions. Rob, that one is for you.
Sure. Good morning, Jemma. Thank you for the question. Really the same answer as before. Continue to look at options, as you say, could use cash, could extend term loans, could issue a bond. All options currently under review. If I may, is there any reason as to why you wouldn't have to or you wouldn't want to issue any more from this entity, would rather start issuing from the sort of parent entity going forward? Look, I don't have anything further to say on the refinancing other than, I'm sure you'll see something from us in due course.
Sure. Noted. Thank you.
Thank you. There's no further questions. I'll hand it back over to your host to conclude today's conference. Thank you.
Okay. Thank you all for listening in today. As our Q1 results demonstrate, Entain's ongoing momentum is underpinned by the underlying strength of our business. Our relentless focus on the customer, our increasingly diversified reach, and our powerful Entain platform leaves us confident for rest of the year and well-positioned for many years to come. I look forward to speaking to you again at our interim results in August. In the meantime, if you have any other questions, do get in touch with David and the IR team. Thank you and goodbye.
Thank you for joining today's call. You may now disconnect.