Good morning, everyone, and thanks for joining us today for our H1 2025 results. I'm Per Widerström. I'm joined today by Sean Wilkins, our CFO. We start with the agenda on slide two . I will give a quick introduction and then on to financial performance, which is consistent with the trading update we gave a few weeks ago. Sean will talk through the details of this, as well as covering our current trading and outlook for the year ahead. I will then cover strategic progress and how we are executing against the value creation plan before taking your questions. Turning to slide three and a quick overview of some of the key highlights for the half. Firstly, having returned the business to growth last year, this has continued with our fourth quarter in a row of growth.
While first half growth of 3%, or 4% in constant currency, was a little bit lower than where we wanted it to be, we saw improving trends through the half with Q2 growth of 5%. This has been driven by continued very strong performances in our international core markets and retail return to growth. Secondly, we have significantly enhanced the profitability of the business. This is through direct actions like operating model changes and associated cost reductions, as well as driving operating leverage by growing the top line and being more effective and efficient with our bonusing and marketing, improving margins. As I've said before, we're executing both a short-term turnaround while investing in building out our longer-term capabilities. We made great progress on both of these fronts through the half, which we'll cover in more detail later.
The strategy is working, and we are pleased with our progress, but we know there is a lot more to do. We're excited about H2 and remain laser focused on execution as we strive to deliver our value creation plan. Sean will now cover the financial results.
Thanks, Per, and good morning, everyone. Before I jump into the detail, I just wanted to start by saying I'm delighted to be reporting a strong set of numbers for the first half, which deliver on exactly what we said we would do. Drive profitable growth. Four quarters in a row now of revenue growth and the improvement into Q2 at 5% gives me confidence in the rest of the year. Improve profitability. We delivered a step change in EBITDA with 44% growth for half one and LTM EBITDA of £363 million. Deleverage. Our leverage is down to 5x , which is 1.7x better than just 12 months ago and down from 5.7x at the end of 2024.
In terms of the detail, you can see on slide five, total revenue for the half was rather poetic £888 million, which was up 3% as reported and 4% in constant currency. On adjusted EBITDA, we delivered £166 million, which was at the higher end of the range we gave with our trading update and up a fantastic 44% year- over- year. We talked last year about the poor first half performance with additional marketing that failed to deliver, so we knew we had an easier comparative, but the strong growth in EBITDA is reflective of a real step change in profitability, which I'll talk through shortly. In U.K. online, we saw revenue down 1% for the half, with Q2 showing sequential improvement in both absolute terms and growth rate, but still only flat.
Per will talk through in more detail, but one of the reasons for the lower revenue growth is our evolving marketing approach, particularly on the 888 brand. Historically, 888 had very poor marketing returns in the U.K., and we are addressing this now, which is acting as a bit of a drag on revenue but aiding significantly better profitability. These marketing changes, as well as optimizing our bonusing and delivering structural cost savings in OpEx, mean that adjusted EBITDA was up £16 million, or 37% year- over- year. In retail, the business returns are growth for Q2, which was the first full quarter with all our new gaming machines rolled out. However, for the half as a whole, it was still down 2%, driven by sports, which is primarily affected by market-wide issues such as the racing industry being under pressure and wider High Street football dynamics.
We're also addressing some competitive gaps in H2, which, along with the good performance of the gaming machines, is driving our confidence in the second half. On EBITDA, we saw the impact of negative operating leverage for the half, along with higher fixed costs from national insurance and national living wage changes, which offset savings we have made. The international segment continues to perform really strongly, with revenue growth of 13% driving excellent operating leverage, which has been helped by structural cost reductions and more efficient bonusing and marketing. As a result, EBITDA more than doubled to £86 million and made up over half of overall group EBITDA for the half, highlighting the improved diversification we're getting from the international growth. Central costs increased slightly, with most of the cost reductions landing in the divisions, meaning inflation and investment in capabilities added a little bit to the costs here.
In the appendix to this presentation, there are the usual additional slides covering quarterly performance, as well as the reported results, including details of any exceptional items and adjustments. Turning to slide six, these charts focus on our adjusted EBITDA development. On the left-hand side, the bridge walks through how we went from £115 million EBITDA in half one last year to £166 million in half one this year. You can see the key movements here being the revenue growth, but also the gross margin improvement. This has come from online, both U.K. and international, and is driven by a combination of the actions we've taken in the past year or so since Per and I joined. We closed US B2C. This means saving on the market access and other fees that went through cost of sales.
We have migrated more of the business onto the in-house platform, including Mr Green in all international markets, as well as utilizing more of the in-house sports trading platform. These are driving revenue share savings from removing third parties. Crucially, as we've talked about before, we have really optimized our use of bonuses and free bets, focused on being more personalized. We pay tax on gross revenue in most locations, meaning this reduction in bonus spend drives an improved effective tax rate on our revenues. Marketing was £12 million lower year- on- year, and we drove 4% revenue growth despite this, evidencing the better returns we're getting this year. Finally, our cost base is £4 million lower in the year despite NIC and living wage headwinds, along with the underlying inflation.
This is due to the direct actions we have executed to take cost out of the business, and this is something we continue to do. We know there is more to go at. On the right-hand side, we show a similar bridge to what we had at this point last year as well, walking through how we go from the £166 million we delivered in H1 to what we need to deliver to meet our guidance for the year, which remains unchanged. We know our marketing will be lower in the second half, in line with a normal seasonality profile of marketing, despite being a bit more balanced this year as we've got greater control over the marketing function.
Our total cost base is expected to be higher in the second half, with a full impact of national insurance and living wage, along with recent increases in tax in Romania, and our plans for significantly improved staff bonuses if we hit our targets. We've also identified some additional cost savings that should deliver £5 million- £10 million benefit in the second half. As you can see on the bridge, though the main driver of the half on half improvement is the operating leverage we will get from the revenue growth, which will deliver £40 million- £50 million EBITDA. I won't talk at length about this here as Per will cover a lot of the plans for H2 and the improvements we've made and are making, particularly on product.
I'm confident that we have some really clear plans to drive growth in the second half, and the improvement from Q1 to Q2 shows me we're heading in the right direction. One final point worth calling out is that we have some flexibility in that we have more closely aligned wider remuneration to business performance. If we achieve our targets, there is an enhanced staff bonus. Clearly, to the extent we might miss any revenue growth, that would be self-correcting through the bonus to some extent, meaning we have strong confidence in our ability to grow EBITDA. Turning to slide seven on our cash flow, this is our usual bridge taking you from opening to closing cash, excluding customer balances. Just a few things worth calling out here.
On tax, we received a tax refund earlier in the year, and you'll recall at full year results, I'd said this was why we didn't expect much cash tax for the year as a whole. On working capital, we expect this to be positive for the year, one of the drivers being the second half growth I just discussed, which should drive positive working capital. The first half was slightly negative, driven primarily by timing of PSP receivables. Exceptional costs for the half of £13 million in line with our plans, and we continue to monitor the cash cost of exceptional items closely to ensure we're getting strong ROI on any of the spend. Interest was in line with the £175 million- £180 million guidance for the year as a whole.
We repaid £14 million of the RCF during the first half, and other represents the ongoing amortization of the dollar term loan, as well as some additional funding for 888 Africa and a £9 million translation effect from movements in foreign exchange. You can see on the top right table how the growth in LTM EBITDA has delivered significant deleveraging in the period. While net debt was broadly stable, we are balancing reinvestment to drive growth. As that growth comes through and as exceptionals reduce, we remain confident in our ability to drive strong future cash generation and hit our fiscal 2027 target of less than 3.5x leverage. Turning to slide eight , and just to close this section with some comments on current trading and our outlook for the year.
July was a relatively flat month, but this was expected as we lapped the end of the Euros, and July is always a quiet month, so it's difficult to extrapolate anything from that. We have seen a good pickup in August as the football returns, and with the Premier League starting this coming weekend, we're seeing really strong engagement on our new free-to-play game. Underpinned by the continued growth in gaming, retail cabinets performing as planned, and a strong product pipeline for the second half, I remain highly confident we can achieve our plans and our guidance for the year is unchanged. We should end the year below five times leverage and remain confident in our medium-term targets and delivering the VCP. I'll now hand back to Per to provide some details on our strategic progress this year and the plans for the second half.
Thanks, Sean. Turning to slide 10 with a quick reminder of how we're going to deliver the value creation plan and our strategy to execute on this. Hopefully, this is familiar to many of you now. The detailed strategic framework is in the appendix, but this slide summarizes what it means across the key areas of what we will do, how we will do it, and where we will do it. We have already completely transformed this business. It is a total reset, and we know there is still much more to do to get this business performing the way it should. It is clear to me, though, that the strategy is working. We made great improvements in many areas, and the financial performance has started to evidence that now too. We are committed to driving value for our shareholders.
Turning to slide 11, while Sean has covered a lot of this already, I wanted to start with the evidence of what we are doing, which is essentially delivering what we said we would. Number one, drive sustainable revenue growth. I am delighted to report a fourth quarter of growth and Q2 being at 5%. Delivering growth while simultaneously taking significant costs out of the business and transforming the ways of working is not easy. I'm pleased that performance is driving across all the divisions. Number two, improve profitability. This is clear evidence of the step change in profitability with LTM EBITDA now at £363 million. We also know there is still more to go for, and we are laser focused on driving further operating leverage. Finally, number three, deleveraging. We have significantly reduced leverage over the last 12 months by 1.7x to now sit at 5x
This has been driven by the EBITDA growth with careful reinvestment, meaning net debt is broadly stable, and this trend will continue for a little while longer while we transform the business. We're committed to bringing the leverage down, though, and remain on track for our 2027 target of below 3.5x . Turning to slide 12 and focusing on how we are driving execution. We break this down into three areas where we are aiming to create long-term competitive advantage, and we made good progress against each of these in the half. We have also been executing a short-term turnaround in performance, and while we are back to growth and have substantially improved our profitability, this relentless focus on turnaround does not stop. We continue to balance our approach to long-term investment and short-term operational improvements, and we still see plenty of areas where we can execute quick wins.
On our drive for operational excellence, we have made significant progress in our Operations 2.0 strategic initiative, which is all around our AI and automation efforts. In H1, we automated a lot more custom journeys to improve the experience and reduce the need for manual interventions. This includes play safety features as well as account reviews, withdrawal requests, and enhancing our chatbot. This investment is driving long-term capability, and it's a key enabler for our ability to both personalize and improve the customer experience, as well as continue to take cost out of the business. These benefits will compound and drive higher margins over time. On the marketing side, we are transforming our capability, including new leadership.
We have evolved our approach with data-led improvements to our media mix, measurement, and targeting, all supported by our customer lifecycle management strategic initiative, which has delivered some exciting initial benefits from personalized marketing and improved segmentation. This is an area we continue to focus on, with further improvements to come in the second half as we improve our real-time data capabilities and expand the platform integrations. A winning culture is all about our winning organization strategic initiative, which links in with Operations 2.0, but it is all about transforming our ways of working. In the first half, we continued to execute changes to take cost out of the business and streamline our decision-making processes.
This business was two slow tankers coming together, and we have had to make and will continue to make drastic changes to make sure we are as efficient and effective as we can be, putting the customer at the heart of our operating model. Leading brands and products. Our customer value proposition strategic initiative sits at the center of our strategy, and everything we do should align around delivering what our customers want. This comes from brand and product, and in the first half, we made significant progress here with the launch of the new William Hill customer value proposition. If you use our products, you will have seen the new look and feel in our color scheme, but the CVP goes far beyond simple look and feel. It impacts everything we do from price and promotions to product and customer experience.
Customer research is informing everything we do, and we are getting really clear about the customers we want to win. Our product and tech foundation strategic initiative has delivered a step change in our product capabilities, with much more focus on product rollouts and improvements, and ongoing focus on simplifying the UX across our products. There have been a lot of exciting new features in H1 and plenty more to come, but I will cover these in more detail over the next few slides. Turning to slide 13, covering the part of the value creation plan and the focus on our core markets, I will start with retail. This was a big half for retail as we successfully completed the rollout of 5,000 new gaming machines. Now I'm pleased to say they are performing in line with our expectations, and we are taking market share.
You can see from the chart in the middle that now we have the first full quarter of new machines without the temporary disruption of installation, and gross win per machine per week is around 15% higher than it was on the old machines. This should continue to drive growth through the second half. We are aware that we have lost a bit of ground on the sports side. This largely reflects historical underinvestment on the digital side of things, where we are still operating some very old SSBTs, and our user experience on them is not up to par. We have been addressing this through some UX improvements, and in the second half, we plan to replace a significant number of SSBTs, as well as adding some additional ones in select locations to close the density gap we have with some of our competitors.
Along with the changes we are making to pricing, promotions, product, and overall in-store experience, including additional channels to expand our content offering and the store refresh program for select locations, we are confident that retail can continue its growth curve despite tough High Street conditions. Retail profitability is down in the first half. Some of this reflects product mix with the new cabinets driving high revenue share and duty charges, and some reflects the additional cost headwinds from national insurance and national living wage. As a result of those cost pressures, we closed a small number of shops in the first half and will continue to keep estate under close review to show we are not carrying a tail of loss-making shops.
We also continue to look at the cost base where it's possible to drive efficiency, but the real change will come from the top line growth where we can generate strong operating leverage on the fixed costs. Turning to slide 14 and viewing Ireland online, revenue was broadly flat for the half, and it's fair to say we were somewhat disappointed by that. Do we want and expect more? Absolutely. However, we are not here to chase growth for growth's sake. We are focused on profitable growth. For this reason, I'm okay with the flat top line performance in the first half because we're undergoing a transformation and we have delivered a step change in profitability. The overhaul of the marketing function, the shift in strategic focus to customer value over volume, the optimization of bonuses, all of these are key factors in driving up our contribution.
With structured cost reduction on top, we are able to report 37% growth in the adjusted EBITDA for U.K. and Ireland online. One of the key features of the U.K. is our multi-brand approach, and the business has struggled in the past to get this right. You can see on the chart here that revenue growth is being driven by William Hill, and particularly William Hill Vegas, which is performing really strongly. Overall, for H1, William Hill was + 3% and 888 was - 14%. Within this, William Hill Vegas was + 12%. We believe as a brand, it is clearly taking market share, and this has been supported by the relaunched app and improved CX and UX. The reason for the decline in 888 is our focus on profitable growth, and you can see this on the slide with revenue down double digits, but contribution up double digits.
The reality is that the returns on market spend for 888 simply did not stack up, and we have evolved our approach here as part of our overall marketing transformation that I mentioned earlier. In the U.K., we have also onboarded a new brand and media agency, and renegotiated some of our key channel partner agreements. William Hill is a strong brand. They have a good handle on what we needed to do, which addresses the product gaps that have arisen in recent years. We have done a great job here, and the William Hill products are now among the best in the market in terms of features and UX, and we continue to drive ongoing improvements here. During the first half, we relaunched new football and horse racing pages with much more simple and slick designs and features such as the pre-built popular app guides on horse racing.
For the start of the football season, we are improving the bet builder and cash-out offering, focusing on our app guides and bet builders, including our new app guide boost promotion, and supporting all of this through the launch of a fantastic new free-to-play game called Final One Standing, which mirrors the popular game format of picking one team a week to win. This season hasn't started yet, but we have seen some great engagement on this already and expect well over 200,000 signups by the kickoff. We are really excited about seeing this develop through H2. On the sports trading side of things, we have improved underlying margins through a new pricing risk management approach and seen a significant increase in automation and improved product breadth and quality.
On the gaming side, we relaunched a new William Hill Vegas app, launched Bonus Drop Boost as an exciting daily engagement feature, and we have some further UX improvements to come in the second half. We also recently launched Jackpot Drop, which is a unique in-house built jackpot feature enabling players to opt in for a small stake across select games to be in with a chance of hundreds of daily jackpots dropping all the time for small to big ones. This is a shared feature across 888 too, which enhanced the liquidity and the jackpots on offer across both brands. William Hill is growing and has a clear new customer value proposition, our brand CVP, and this is supported by ongoing product improvements. 888 is next on the journey to a new brand CVP, and we'll be looking to launch something towards the end of the year.
For now, I will stay quiet on what that might look like. On the product side, we continue to make improvements such as Jackpot Drop, as I mentioned, as well as UX improvements, particularly for payments, and adding free spins across a wider range of suppliers. The main focus for 888 though has been fixing some of the fundamental issues, particularly poor marketing returns. We have recently changed the management of the brands to separate teams so that 888 can get the dedicated folks it needs to return it to profitable growth. Overall, we're excited for the potential of the U.K. business and confident in our plan to return it to profitable growth. Turning to slide 15 and the international segment, a strong first half performance for our international division and led by our core market, which as a group are up 22% for the half in constant currency.
You can see on the slide here that all markets are growing, and while Romania benefits from the acquisition of Winner, we have seen fantastic growth in the 888 brand here. Importantly, as well as the strong revenue growth, this was delivered profitably. You can see on the right-hand side, we are seeing fantastic growth in contribution. As Sean said earlier, when coupled with cost reduction, this meant EBITDA for the division more than doubled. If we go to market by market for a quick summary, in Italy, we are growing share led by 888 Casino, which continues to outperform local brands and even the omnichannel operators with a strong brand and the product resonates well.
We made further product improvements in the first half, including bolstering our casino content library with additional new suppliers who are successful in Italy, as well as rolling out our own Section 8 library into Italy for the first time. On the sports side, we migrated William Hill onto the Exalogic platform. This has led to some initial disruption through the migration phase, and it's one of the main contributors to the international sports revenue being down. While this was to be expected on any migration, we understand the gaps and a number of improvements have already been made ahead of the start of the football season, and we have seen improving performance each week recently. We were successful in our two license applications, and we believe there is further opportunity in Italy once the relicensing process is complete later this year.
Spain, we are still growing well, driven by gaming again, but slightly losing share based on Q1. The Q2 regulator data is not out yet, but we saw slight improvements from Q1 to Q2. The reason for the share loss is partly the market growth being driven by sports, but our sports project is not up to scratch, particularly William Hill, with the 888 brand gaining share on the gaming side. We are focused on the U.K. first for product improvements on the OpenBet side, where we are getting better return from this, but we have plans in place to address some of the gaps in Spain across the second half. In Romania, we have doubled the business both through acquiring Winner, but also really strong growth in the 888 brand.
The 888 plays have now been migrated onto the Winner platform, and this is expected to drive further improvement in the second half. The Winner management team are doing a great job running the whole Romanian business now, and while a recent tax increase was unwelcome, we are well placed with higher scale now to absorb this and continue to grow profitably. In Denmark, Mr Green is our main brand and one of the strongest brands in the market. During Q1, it was migrated onto the 888 platform. While we saw some initial minor disruption as expected, particularly on sports, Q2 was up 26%, and the in-house platform is driving strong engagement. We also launched a localized version with a free daily wish week in Denmark in H1. We are now seeing record performance in Denmark post-migration.
In the rest of the world, we continue to optimize for profitable growth, and while not core markets, they still get investment where we see a strong business case, such as the relaunch on Swish as a local payment method in Sweden, which is showing possibly early signs. We are almost complete with our U.S. B2C exit now, and while we see a mixed bag of results across the different markets, the portfolio of the rest of the world is back on stability on revenue with higher profitability, which is enabling the core markets to drive overall growth. Finally, on slide 16, with our conclusions before taking your questions. We continue to see the impact of the transformation and reset we have undertaken, with the business continuing its growth trajectory while significantly improving profitability.
As well as improving short-term trading trends, we have been investing heavily behind our strategy, focusing our resources on our core markets and investing in our long-term capabilities. We have great brands and leading positions, which coupled with our clear strategy and focus on execution, means I'm confident as ever that we are well placed to deliver our value creation plan. The improved Q2 momentum and our strong pipeline of product improvements and operational excellence initiatives mean we are reiterating our guidance for 5%- 9% revenue growth and at least a 20% EBITDA margin in 2025, leading to material deleveraging. With that, I would say thank you for your continued support, and we are now ready to take your questions.
Thank you very much, sir. Ladies and gentlemen, if you'd like to ask an audio question, please press star one on your telephone keypad, and also just make sure that your mute function is not activated in order to let you reach your equipment. That is star one for questions. Our very first question today is coming from Richard Stuber, calling from Deutsche Bank. Please go ahead.
Hi, good morning, Per. Good morning, Sean. Just three questions for me. The first one on U.K. o nline. I think actives were down about 15% year- on- year. Clearly, it looks like the 888 brand is much weaker than William Hill. I just wanted to check, are William Hill actives in growth? That's sort of my first question. The second question is more of a group level question. Gaming is now about twice the revenue now of betting. Do you think there's a bigger opportunity now in betting or gaming more generally? It sounds like there's a bit of work to be done, I think, on the betting side of the business. The final question on international. I think you mentioned now that international represents more than 50% of EBITDA. It's faster growing and it's a higher margin business now than U.K. online.
What percentage of EBITDA do you think international could get to in the next few years? Which countries do you think would be the main drivers? That's it for now. Thanks.
Sean, would you take that to total?
Sure. Richard, just running through each of those. U.K. online, William Hill actives, are they growing? You'll know that our strategy has been to focus in on core and high-value customers. As a result of that, where we're seeing growth in William Hill online tends to be more in ARPU than in actives. That's the answer on the first one. Gaming doubled the size of betting. I think your question is, is betting therefore an opportunity? We see opportunities both in betting and in gaming. Gaming as a market is growing significantly faster, so there's clearly a big opportunity there and one that we are definitely taking advantage of. In betting, we are not satisfied that we're just following the industry trend and we have got significant activity, particularly in the second half, to address that. Some good examples are in the retail business. We are refreshing our SSBT estate.
We've got 2,000 new SSBTs coming in. We're looking at pricing in betting. We've got a whole new set of IPTV media going into our stores. We really are leaning into the betting opportunity at the same time, of course, as having put in place 5,000 new gaming machines. Those 5,000 new gaming machines are really driving growth in the retail market. Equally, online, our product pipeline is focused not only on gaming. Gaming is in growth and we're seeing some great products coming through on there like Jackpot Drop. Equally, we are leaning into betting. We've got Final One Standing, which is launched. It's performing absolutely superbly. Over the last couple of days, we surpassed 200,000 actives engaging with that product. That's clearly focused on betting. It's a betting free-to-play game with a view to getting actives into our betting business.
Equally, for the new football season, we lent into AcadBoost. AcadBoost is a key product for us and it's driving activations and it's driving revenue going forward. That was probably a long way of saying, yes, I absolutely see betting as an opportunity in the second half. Equally, gaming with the growth that we're seeing, gaming both in retail and in online, I see both of those as opportunities for the second half. On international, thanks for the question there. The performance in international has been phenomenal, really. Very strong double-digit growth, more than doubling our EBITDA. I'm really delighted with the performance of international. I think the question, to be fair, you said it so quickly, I was scribbling frantically, but I think the question was, where do I see strong growth across the core markets?
The truth is that we're seeing strong growth across all of the core markets. Italy is performing superbly. Denmark, which was probably reasonably lower growth in the first quarter after our migration, has performed absolutely superbly during Q2. We've seen in excess of 20% growth in Q2 in Denmark. Not to mention the impact of migration on gross margins. Gross margin has improved very significantly in Denmark as well. That's part of the reason that's driving the enhanced growth on the contribution side. Romania, I'm absolutely delighted with both the inorganic and the organic side of Romania are growing at exceptional rates. Spain, we're probably just behind the market, but we're still seeing very good growth there and we're focused on continuing to see good growth there. Across the piece on international, I'm delighted with the performance, really. Per, anything to add to that?
I think you mentioned that. I mean, once again, if we look at the U.K. and U.K. Ireland online in particular, I just want to restate that our focus is on profitable growth. They're very encouraged to see the year-on-year increase in EBITDA, which is 37%. We do see that William Hill, in particular William Hill Vegas, is taking further market share. As we said, you know, there's more work to be done when it comes to 888. We're very happy to see that the contribution year-on-year is substantial. One question was related to international share of the EBITDA. It's more than 50% now of the group, which, of course, is also highlighting a greater level of diversification, which, of course, is our welcoming.
That's great. Thank you very much.
Thank you for your question, sir.
Ladies and gentlemen, as a reminder, if you have any questions, audio questions, please press Star, o.ne at this time. Our next question will be coming from Ed Young, calling from Morgan Stanley. Please go ahead.
Hello. Just one, please. You just talked about increased diversification of the group. There's obviously been some discussion in the media around potential tax rises in the U.K. I just wondered if you had any particular comments on your thoughts around the risk of U.K. tax rises this year. Where are you at? Thanks.
Thanks, Ed. The facts are that the consultation on gaming GT is complete. There's no news from that yet, and largely, whatever I say is an opinion and speculation and not really fact-based. The way we see it in the business is that the chancellor and the government do need some cash. I think the gaming industry is a reasonably easy target. We are in a kind of wait-and-see pattern there. The caveat that I would put to that is increased tax beyond a certain point leads to, I mean, it's very clear as well, by the way, that it leads to black market growth. Black market growth leads to lower tax take. I was going to say less player protection, but actually zero player protection. It is completely against the objectives of the government. This is not speculation. This is evidenced in the Netherlands.
When we look at this, our expectation is to see a balanced approach from the Treasury, balanced between a requirement to get more cash in, but also to protect an industry that the U.K. should be proud of, and also to continue to see decent performance such that the tax take increases rather than decreases.
Thank you very much for seeing us. As we have no further audio questions at this time, I'm going to call back over to Millie to take any questions submitted by webcast. Thank you.
Great. Thank you. First question will be from David Brohan at Goodbody. Could you quantify the relative sizes of 888 and William Hill in the U.K. online today? Second question, could you quantify the impact of the tax increase in Romania?
Sure. Thanks, Dave. 888 is roughly 20% of overall U.K. online. It's a 20-80 split. In terms of the impact of Romania tax, Romania GT went up from 21.5% to 30%. In the timing of that, we expect that to become low to mid-single digits. It's not particularly material this year. It's obviously something which gives us an opportunity to work with our suppliers and our partners as well to mitigate the impact of that as we go into 2026.
Great. We've got a couple of questions from Ivor Jones at Peel Hunt. Why is 888 marketing being addressed only now given poorly performing marketing was a feature of H1 2024?
Let me take that one. It's a great question. Just to recap, if we look at Evoke as a company, we are undergoing an absolutely full reset and turnaround of the company. We need to be absolutely laser focused in terms of priorities, you know, where we have the biggest ROI to kick off with. That is an overall guidance, I would say, that we have a full reset and turnaround, and we need to be absolutely clear about the focus and priorities. The reference to H1 2024 poor performing marketing, if you recall, was primarily related to the William Hill brand. That is not to say that we should have done better at that time also for 888, but primarily the William Hill brand and the market investment in H1 2024.
Coming back to the focus and the reset and turnaround, number one, it was all about making sure that we fix William Hill in the U.K. to make sure that's coming back to profitable growth, which we have done and which we are showing today in the numbers we have done now for the last four consecutive quarters. We have done that through building capability in terms of the tools, data, and new leadership step up when it comes to the product. Alongside that, when it comes to 888, which is obviously a very strong brand, in the first phase, it was to make sure that we reduced the marketing to fix the value leakage. This is what we did coming into the phase two.
That was to build, again, the capability, the data, a new team to drive the contribution growth that you see now, which is a double digit. When we look at now, year to go, 2025 and onwards, we are ready now to selectively scale up marketing behind the 888 brand in the U.K. We have a new customer proposition to come by year end. In terms of the product upgrades as well, we are very much determined to bring back also the 888 brand to top line growth. Again, very satisfied to see that the contribution step up year on year is double digit for the 888 brand.
Great. A couple more from Evil Jones. Why does Evoke not want to operate Mr Green in the U.K.? Are shops still relevant to cross-sell? What are your expectations for cash exceptionals in H2 2025 and beyond?
If I start with Mr Green, we are coming back to when we do this full reset and transformation. It's all about making sure we take the right decisions from a value creation perspective. We have a multi-brand strategy in the U.K. with 888 as well as William Hill, and we saw that in order to also capitalize on the Mr Green brand, we thought the strategy when it comes to light capital and high impact alliances would be the right choice for the UK at this point in time. Mr Green is in the U.K. market. We are just having a different go-to-market approach when it comes to the Mr Green brand in the U.K. We are still seeing value coming out of the Mr Green brand in the U.K. When it comes to retail, retail is an absolutely fundamental part of our go-to-market strategy in the U.K.
We are an omnichannel brand when it comes to William Hill in the U.K. We have seen that in terms of retail, it's been all about making sure that our great retail channel, the fantastic people we have there, is having a proposition that is truly competitive. We have a retail channel in terms of William Hill that has been underinvested for many, many years. When we see now that Q2 is showing a growth in terms of retail channels, that is very encouraging. We are investing into upgrading the gaming cabinets, as we have mentioned before, 5,000 installed leading up to Cheltenham. We also are very clear and acknowledge that when it comes to the sport experience, there's more work to be done, and that's why we are investing into upgrading SSBT's portfolio across all the states for the year to go.
As part of omnichannel, an element there of focus is, of course, the cross-sell between online and retail. We obviously know that a multi-channel customer is more valuable than a single channel customer. Very, very relevant indeed. The third question, Sean, would you take that?
Yeah, yeah. Thanks, Ivor. Exceptionals, I expect to be £30 million- £35 million this year and £30 million- £35 million next year, exactly as guided last time.
Great. The next question is from Estelle Weingrood at JP Morgan. Just wanted to ask on your ambition in the Netherlands, given how challenging this market has been regulation-wise as of late.
It's great to see that 888 now is in the market in the Netherlands. I'm just referring to, again, what I said about U.K. and Mr Green. We have some absolutely fantastic brands, 888 being one of those brands. I mean, globally, absolutely fantastic. We do see that if there's opportunity for us to capitalize on our brands, doing that in a capitalized high-impact way is what we'll do. That is actually what we do now in the Netherlands through the partnership with ComeOn. Early signs are very, very positive. As I said, it's still early days, but we are very encouraged by what we see up to now, and we also are very happy with the partnership with ComeOn.
Per, I think the other thing I would add on that is that we've got an excellent partner in the Netherlands, but also the shape of the economics of that is that there is not a significant upfront risk of losses, right? This is a variable revenue opportunity for us. The risk is very low. Estelle, you mentioned that it's a challenging market. Yeah, it is a challenging market, but there's little risk for us to take there.
Great. The next question is from Nick Rupe at Barings. How do you view N10's announcement yesterday of increased marketing spend? Does this change any plans you have for H2?
Let me take that one. I would obviously not comment upon a specific competitor. In short, the way we approach marketing across the brand, across jurisdictions, is always about how do we drive a proper return on investment. Where we have opportunities to scale up, we will scale up the market investments, but always it's about payback, both from a customer acquisition perspective, but also return on retention spend. We are absolutely clear that when it comes to H2, where we see further opportunities to scale up, for example, when it comes to 888 in the U.K., we will do that. Ultimately, it's about a return on investment and that we will continue to have as a guiding light when we decide upon what to do and not to do in H2 2025 and beyond 2025.
Let me take the last one, which is on the EBITDA bridge. The presentation is the £40 million- £50 million coming from revenue growth, or is it coming from revenue growth and gross margin? The answer there, Estelle, is that it's coming from both. We saw significant improvements in gross margin in H1, and I'm expecting that to move into and be continued in H2. Just to give you a quick overview of the things that are driving that, we've exited the U.S., B2C that is, so there's no more market access fees there. We've got Mr Green migrations, which I mentioned a little bit earlier in Denmark, but also in some of our dot-com markets, which means that we're avoiding third-party cost.
We've got significant bonus optimization across the piece, and because we pay GT on gross gaming revenue, that means that our GT, which goes into gross margin, is reduced. The benefit that we see on revenue is kind of enhanced by the fact that our gross margin has risen in H1, and I strongly expect that to continue into H2.
Great. A question from Yuliya Branshtein at Tresidor Investment Management . Could you please describe what other OpEx phasing is of $20 million- $30 million in EBITDA bridge on page six? What drives that phasing?
Sure. There are three elements in here. One is NIC, National Living Wage changes. The reason that it's called phasing is that those changes came in in April, so they were only prevalent for half of the half, if you like. We'll have them for all of the second half, and therefore there's a phasing impact of that increase in cost. That's equally true of salary increases. Each year we have a certain budget set aside to increase salary. That also only comes in in April, so you get a phasing effect of that into the second half. I suppose the third thing is remuneration that's linked to performance, so we do have a bonus scheme. The great news about the bonus is that to a large extent it hedges EBITDA performance because it's absolutely linked.
If EBITDA performance is not achieved, the cost of the bonus that we accrue goes down significantly as you go through the second half, therefore mitigating EBITDA misses.
One question from Evil Jones at Peel Hunt. If the focus of product development and management restructuring was the U.K. and the U.K. revenue was disappointing, does this mean that the international will suffer as it becomes the focus of management attention?
Once again, when we look at the U.K., especially if we look at now the U.K. online, as I said, we are very, very encouraged to see that the contribution growth that we do see, as well as, of course, the step change when it comes to the underlying EBITDA from online in the U.K., and we continue to see that performing very well. Yes, we have had an absolute focus on U.K. to start with, but I can tell you that is not stopping the focus when it comes to international. We can see when it comes to our core international markets, which is substantially up year- over- year, both in terms of top line as well as underlying contribution and obviously EBITDA. We as a company have fantastic team members and organizations that we need, and we are focusing both on U.K. as well as on international.
Again, when we look at the pipeline we have in terms of product upgrades across the brands internationally, likewise when it comes to the leadership step up we have, we are very confident that the growth will continue and the profitable growth will continue also for the international markets.
Yeah, hopefully that was a bit of a tongue-in-cheek question, Ivor. I'll just reiterate what Per says, which is that the first half has been a successful half for U.K. and U.K. revenue in the sense that we are aiming at profitable growth and that we are setting up the business to make sure we're achieving profitable growth. Focus and attention on international will continue to drive profitable growth in international, which, by the way, has been phenomenal in the first half. Thanks for the question. Last question, I think I've also asked this one. Is there an update on tax and legal provisions since 2024 results? Can you give a guide when there might be certainty? There are two parts to this. You've got Austria tax, which is we're still in discussions about the provision that we've got there, provision of roughly €65 million.
Then custom claims provisions across Austria and Germany, position and advice on that remains completely unchanged as per the last guidance that we gave. Yeah.
Great. There are no further questions on the webcast. I'll hand back to the speakers for closing remarks.
Thank you so much for that. I just would like to say a few words ending this call. In short, we truly believe that the strategy and transformation is working and that we see that through the numbers that we are sharing and announcing today. As you can have seen and heard, we're having a significant transformation that's going on across the group. As you recall, we had a company that had been in three years of decline in terms of top line. Now to say that we are the fourth consecutive quarter of revenue growth, I think that's a great testament for the organization, for the Evokers, but also for the strategy and transformation efforts. Secondly, as we have called out today, we have a significantly improved profitability. To see that year-on-year adjusted EBITDA up 44% is a milestone for the company.
Likewise, to see that LTM adjusted EBITDA up to £363 million. Equally important is that we see the continued progress when it comes to deleveraging. As we called out earlier today, it's a 1.7x reduction year- over- year to five now at the end of June 2025. Evoke is very much well placed for further growth for the year to go, so H2 2025 and beyond, as we are adamant to drive and continue to ensure a short-term training turnaround, but at the same time investing into future capabilities to drive mid and long-term value creation. With that, I just would like to thank every one of you attending the call and also thank you for your support. Thank you so much and have a great.