Morning, and welcome to the Flutter H1 Results Update Call. My name is Jo, and I'm your operator today. Today's call is recorded. There will be a chance to ask questions shortly. But first, I will hand over to Peter Jackson, Group CEO of Flutter.
Please go ahead, Peter.
Thank you, Joan. Good morning, everyone, and thank you for joining us. With me today is Jonathan Hill, our CFO. Hopefully, you've had a chance to read our announcement and watch the presentation we released this morning. But for those that have not yet, I'll just cover off a few of the key points.
Firstly, we're very happy with the progress we've made in continuing to scale our U. S. Business. Flutter US is now 50% bigger in revenue terms than our next nearest online competitor, with the gap between FanDuel and each of its competitors widening during the first half. Our sports betting and gaming customer base is now 3x as big as it was just 12 months ago, Having added 1,700,000 customers in the last year alone.
We believe that our superior sports products and the strength and reach of the Fanjul brand have been the key drivers of this growth. In Q2, we crossed the 0.5 As a result of our strong customer acquisition and retention, we now expect to generate between $1,800,000,000 $2,000,000,000 U. S. Revenue this year. While delighted with the performance of the business as a whole, our market share in sports betting particularly stands out.
We finished Q2 with a 45% share of the U. S. Online sports betting market, leading in new and more mature states alike. And while we believe there are good opportunities for us to grow our gaming share as we better leverage more Flutter's in house capabilities, it is the shape and pipeline of new state regulation This emphasis on sports betting that is particularly exciting. We now expect up to 9 third of U.
S. States to regulate mobile sports betting by the end of 2022, close to doubling the proportion of the U. S. Population will get out of sports betting legally online. And of those 9 states, just one is expected to regulate gaming initially.
Given the strength of our sports betting offering And the key competitive advantages we enjoy in this space. We feel this positions Fanjul very well to compound its leadership position. Secondly, our performance outside the U. S. Has exceeded our expectations during the first half.
In both our UK and Ireland And Australia divisions, online earnings grew by more than 50% year on year in the first half. This has been driven by recreational customer growth. We grew our average monthly players, or amps, by 44% in U. K. And Ireland and by 52% in Australia in H1.
These growth rates reflect an ongoing shift for customers from retail to online. In UK and Ireland, where we have only emerged fully from restrictions relatively recently. It is probably a little bit soon to say definitively how permanent that shift in player behavior has been. But in Australia, which was largely unaffected by COVID for much of H1, and while our retail competition was open, we now believe that the events of the last 18 months resulted in a permanent step change in the size of our business there, with customer attention that has exceeded even our most optimistic expectations. In international, the revenue declined following the spike in player activity in H1 last year, but was less pronounced than we expected, Albeit, the division did continue to benefit from a tailwind from ongoing stay at home restrictions in parts of Europe.
We're transforming the shape and quality of our international division by investing more in regulated and high growth markets with encouraging early signs. Our customer base in H1 was just 3% below the elevated levels of H1 last year. What this all means is that we have today issued 2021 EBITDA guidance for the group ex U. S. Of GBP 1,270,000,000 to GBP 1,370,000,000, Materially above current consensus.
Finally, we've announced this morning that we now believe our U. S. Business will be profitable in 2023 Based on the expected timetable for new state regulation, we believe this will have a transformational impact on the overall earnings, Cash generation and balance sheet profile of the group. To be clear, we are not setting a target date for profitability. The date our U.
S. Business turns profitable remains an ample for us. We remain entirely focused on growing the embedded value of the business by acquiring as many customers as we can as long as we can, generate attractive returns on investment. The 2023 projection instead reflects simple mathematics. We now believe we will reach a tipping point in 2023, where the share scale of our existing U.
S. Customer base and the positive contribution those customers generate Slide 2930 of our presentation cover this in more detail. Our projection assumes that none of California, Florida or Texas launch online profitability could be delayed. The such scenario represents a nice problem to have, as it would mean our TAM will be bigger again. If the U.
S. Does turn profitable in 2023, it is not difficult to see what that would mean for Flutter's overall earnings and cash flow profile and the leverage benefits that would bring. Overall then, I'm delighted with how the business is performing and the longer term prospects for the group. With that, I'll be happy to take any questions you have. As always, in interest of giving everyone a chance to ask their question, can I ask you to limit yourselves to 2 questions each to start with?
There's time at the end, I'm more than happy to take follow ups. With that, I'll hand over to James.
Thank you. We have our first question that's coming from Michael Mitchell from Davy. Go ahead. Your line is now open.
Yes. Good morning, Peter. Good morning, Jonathan. Thanks for taking my questions. 2, if I could.
Firstly, on the U. S. And one of the more notable features of your performance in market share terms for us has been what appears to be a strengthening In your position as each state becomes more established. And you can comment in terms of market share kind of across New Jersey, Pennsylvania and Indiana being 51% in the period. I wonder if you could comment on that dynamic, why you think the gap between FanDuel and other competitors tends to widen and how sustainable those structural drivers are?
And then secondly, on Australia, if I could. Despite the snap lockdowns in the country, that country did emerge from the more sustained COVID disruption 7 or 8 months ago, and yet A and Ps in Q2 were up 61% year on year against a high watermark. I wonder, could you comment again just in terms of how why you've been so successful in retaining what looks to be the majority of the retail customers you acquired through the COVID disruption? Thank you.
Thank you, Michael. Look, I think the question you asked about the The U. S. Is an important one because it is true that we are seeing our position strengthening in sports. I think it's down to the factors that we've talked about for a long time.
We do have a fantastic product, And we do benefit from having brilliant pricing and risk management capabilities, not just in Candidral, but ones which we can leverage from across the globe as well. If I reference a few pages in the presentation, if you look at Page 33, for example, and you look at The benefits we're getting from same game parlay as an example of what we're doing from a product perspective. I think that's a really good example. And it's one thing Yes. It's better to buy these products in externally, which often leaves them sort of sat on the side of the products.
But it's another thing to actually develop its inherent as we've done I'll have it as an integral part of the customer experience, and I think that is important. And if you look at Page 35, you can see That we've seen some very structural benefits from margin, which have actually only grown in recent times, that has actually customers have taken advantage of some of the range of products we have. And I think one of the things that we're showing today that we haven't commented on before, you see on Page 37, is actually the database we have for DFS has almost doubled Since 2017, and that's as a result of the big investments we've been putting into the Fandral brand. So I feel like a lot of this We are continuing to invest in product. We are bringing more of our markets that we're managing from a pricing risk management perspective in house.
And we are continuing to pour more money into building and developing the Fanjul brand and with all the benefits that that drive. So Yes. I think we're in a strong position. With regards to your question about Australia, It is true that the Australians have had a very different sort of path through COVID to the rest of the world. And unfortunately, a lot of them are now back into lockdown there.
But look, I do believe we have seen a permanent step change in the size of the business. And whilst last year, there was not a lot of sport going on, but racing continued. And so that has undoubtedly led to Growth in AMPS. I think what we're seeing is a lot of customers trialed and sampled our online product in the period and actually found that they really liked it. Keith.
We've got some fantastic product innovations in the Australian markets. We just launched Bet With Mates, which has been a fantastic way of bringing in another wave of new customers. And of course, we're offering generosity And value to our customers in the market in ways that the retail monopoly provider can't do. So I think That's what's leading to us having as a permanent step change in the size of the business. And of course, we're getting brilliant operating leverage off the back of that as well.
It's really we haven't had to sort of grow our business At the same time. And look, we'll talk more about that in September, on 22nd, when we do our Investor Day. So it'd be a good opportunity for you to
The next question is coming from Ed Young from Morgan Stanley.
Hi. Thank you for taking my questions, and thanks for the additional Disclosure on the U. S, very useful. My first question is on the U. S.
You mentioned a couple of times, Peter, direct casino acquisition. And I note your Well made points around the next wave of states being sports. Most of what you spoke about in the presentation was it sounded like the I'd like to ask you a little bit more around about brands. I appreciate you've got perhaps you could touch on that. But do you think you need another direct acquisition brand?
How do you think about casino or gaming databases in the States? And And then my second question is on international, sort of the mirror image of the rest of the group in terms of sort of gaming versus sports, I guess. I know some of your launches over the last year have been even on third party platforms, I guess, for sort of pace and you're going to move to in house. So can you just give us a little bit about that transition, how you think sports and international growth in general might look and What the time line for is that? I know you said it won't be overnight, but just to give us an idea of when growth in that area might look a bit more like growth in some of your other markets On the sports side, I'll strengthen that side.
That would be very useful. Thank you.
Thanks, Ed. Look, and I realize we've put a lot of information out Well, as it relates to the U. S, we I think it's it is right that we've got a very strong position in sports. FanDuel has always been synonymous with that. The DFS database has given us a strong advantage, which has allowed us to build to the position that we've got to.
Yes. I think it is also worth remembering that when we think about casino, we run the world's largest online casino business And have tremendous capabilities, knowledge and know how in doing so. And so the plan that we have For the U. S. Is to make sure that we can bring a lot of that expertise into the U.
S. Market. And we will continue to do so, whether it's the products that we've developed and grown in house. And actually, when I look at the proportion of our revenues in The international casino business that comes from our own products, there is now sort of approaching 20%, which I think positions as well and shows that we're good at building our own products out. So that's one thing.
But we're also getting much better at improving the cross sell journeys that we see in the U. S. So for example, we were able to offer some promotional mechanics to users of the same game pilot product that gave them in states where it's relevant access to some free spins and casino. Having the largest user base of sports betters gives us a tremendous ability to cross sell into casino in the U. S.
You're right, we do have the iconic Stardust Casino brand, which we're using In the U. S. Market. But I think it's there's a lot of plans, and we've got a lot of significant opportunity to extend and improve what we do for the Fanjul brand as well. But I think the most important point It's actually the fact that we continue to lead in sports, and that gives us a great platform to grow from in casino.
And of course, 8 of the 9 Next states to launch are going to be sports only. I mean, I'd probably add that you remember that where we have States where we're doing gaming and sports betting, we have market access partners like our We worked very hard in terms of cross sell from those offline databases to online as well. So we do access Keith. Through our market access partners, more online potential customers as well. So that's another area where we work over And look, regarding your question about international, look, it is right that we have used Some third party platforms.
So we've done that recently in Colombia just to give us the ability to get into market quickly. It's not that similar to what we did in the U. S. Market, remember, where we used third party platforms. And when the time was right, We've moved that business over onto our core platform.
You'll also have seen that during the period, we announced the acquisition of Singular, which is the technology stack that powers Ajara Bet, our business that's very successful in Georgia, Armenia. And that gives us an additional set us a capability that will be useful for us in that part of the world and indeed, possibly elsewhere. So we have we are developing out our capabilities in house. As it relates to putting the global betting platform into the international business, we hope that we'll go to trial a small some markets towards the end of this year. But as you say, it's going to take a while before we get that fully rolled out.
The thing I'd focus on in international is the success we're seeing we've been making to grow that business through things like affiliates and some of the campaigns we put in have been very successful. We've got 5 times the number of Customers coming direct into our business than we saw pre COVID. So we're pleased with the progress we're making In international and casino as well.
Thanks very much. Appreciate the detailed answers. Thank you.
Thank you. The next question is coming from Karanjit Ghul from Bank of America. Please go ahead. Your line is open. Hi, good morning guys.
I think just building on that question on brands, we saw Draughtings acquiring Golden Valley yesterday, you've got 5 brands already in the U. S. So maybe you can could you comment on the rationale and potential benefits of having the several brands in the U. S. Is there any time when you ramp up investment or focus into other brands other than Sandoz?
And then the second question is around your U. S. 2023 positive EBITDA. That's really encouraging. I know in the past you mentioned a potential IPO for the U.
S. Do you still see much virtue in spreading out the U. S. Beyond just the potential valuation crystallization. And if the U.
S. Work is separate, would you expect the U. S. EBITDA to come down, say, on losing some of the benefits of having flatter group level fee of benefits. Thank you.
Okay. Keith? So look, we've obviously shared quite a lot of information with the market today in terms of how Successful within using the Fanjul brand for customer acquisition. And you can if you look at the Charles, on Page 27 of the presentation, you can see that as we've grown through the number states the number of customers we've acquired. And we've now got over 2,200,000 sportsbook and gaming customers as a CPA of $291 Whilst we continue to see the results that we're seeing, we are going to invest very heavily behind the FanDuel brand, and that's very successful for us.
You are right that we have a number of other brands available to us in the market, and we will continue to push on those as well. And I think TVG is a good example where We've seen real benefits as we have grown that business, but we've also launched racing under the Fanjal brand as well. And we have, as we were just discussing with Ed, Keith? The Stardust brand. So I think we have we like operating, if we can, in markets with multiple brands.
I I think it gives us a good opportunity to target different groups of customers who've got different needs, and we'll continue to do that and and invest as much money as we can when we see as compelling a set of acquisition costs to lifetime value dynamics as we shared with you in the presentation. I think it I see the second part of your question. I think It would be worth making a very important point of clarification. Whilst we have been contemplating an IPO of a small stake of Fanjul. We if we were to do that, we would consider it to continue to be a self controlled subsidiary of And therefore, nothing would change in terms of the way in which that business would operate in terms of continuing to provide No support to the rest of the group through things like its price and risk management capabilities and enhancements it builds to things like the Global Bedding platform.
And nor would anything change in terms of that part of the business being able to benefit from the broader Flutter family. And I think one of the endowments Things that's helped driven the success of the FanDuel business over the years since we've owned it is the fact we've had so many cheerleaders on the side supporting it. There's 5,000 engineers across the rest of the divisions in Flutter who are helping support the Fanjul business, and that's a very important part. So If we were to go down a path as an IPO, it would only ever be for a small stake, and it would be important that we continue to be as a controlled subsidiary. And that would allow us to maintain the sort of symbiotic relationship that we see between that division and the rest of the group.
Okay, perfect. That's incredibly helpful to know the economics we'll be putting. Thanks a lot. Thank you. The next question is coming from Simon Davis from Deutsche Bank.
Please go ahead.
Yes. Good morning. 2 from me, 2, please. Firstly, you talked about 160 basis point decline in net revenue margin across the group. Keith.
Can you talk a bit about how that breaks down, I. E. How much of that is down to bonusing increases, how much down to pricing? And Can you give us a bit of a feel in terms of your pricing strategy in the U. S.
Now? Are you still increasing bonusing or suppressing pricing to support growth rates there? My second question is on the international division. Obviously, a big impact from online poker. Can you break out What percentage of revenues now come from online poker?
And has that business finally stabilized year on year? Roughly, how is it running as a percentage relative to pre pandemic levels? Thanks. So maybe Simon, I can deal with the first question. So we talked about the 160 basis points reduction.
Actually, about half of that was due to reduced luck across the group, reduced positive sports results, so while still positive about 120 basis points in the half year period in 2020 was actually 200 basis points of positive sports results. And secondly, we have invested more In generosity, which is the other element. And that's helped us drive the fantastic performance we've seen in terms of our AMP growth across the group. So we continue to work on optimizing the right level of generosity versus and how that plays into driving the top line. So those are, To me, the critical points.
And look, as it relates to our pricing strategy in the U. S, When you look at the page in the presentation on margin, which is on 35, don't think that the fact that this Line is heading upwards. Is anything to do with us moving our core underlying Pricing, we're not moving our sort of big or overrounds depending on whether you want to take us as an American way of looking We've maintained our very, very tight pricing. It's actually through product mix But we've actually seen those margins change. I think the other thing Keith.
The other part of your question was around the international division.
Can I just add
one other point? Because of our tight pricing in the U. S. And because the U. S.
Is becoming such a much bigger component of the group, actually, our expected margin was down Marginally in the first half over the first half year before, only because of the very aggressive pricing we've got in the States. So there's sort of 3 components, A little bit more aggressive a little bit more a bit a small reduction in expected margin due to the U. S. Becoming a greater component, A bigger step down in luck, which is the bigger element, and then a smaller increase in the promotional spend, just to give you 3 moving parts in terms of overall group. Okay.
So, Simon, in terms of the second party question around what's going on from a poker perspective, Yes. Look, I mean, if you look at the gaming amps in the first half and compare them with the prior year, which was a very tough Comparative coverage, and it's down 9%. And so we still maintain 91% of our customer levels in 2021. We had our 2nd largest tournament ever in poker with Sunday Millions in the period. I think we're doing great things around Live the live streaming category in poker where PokerStars branded and sponsored content had Around twothree share of all poker views on Twitch.
So that part of the business is doing well. Keith. Yes. And I'm pleased that we're making some changes to the way in which we look at reward and generosity keep So that part of the business, so we're trialing a new reward scheme. But I think we said Today, we've seen that business perform better than expected.
I think we saw a large influx of new customers last year, and we had expected volumes to key more than they have been. And I think the team has done a great job in retaining those customers into things like casino And something across our enterprise, although we know there's a lot more to do in particularly in sports. Can you split out what focused on what it is within international and whether that has stabilized. Can you disclose that, Well, Simon, we'll come back to you. I don't have the figures to hand.
Yes. Okay. Thank you very much.
I mean, I think the easiest way to look at it, Simon, is that the in terms of the gaming revenues in H1, It's roughly equal between the 2, but actually Casino overtook poker in the second quarter.
Thank you. The next question is coming from Joe Thomas from HSBC. Please go ahead.
Good morning. A couple of questions, please. One is the U. K. Responsible gambling initiatives.
Yes. I think you said that's going to be ramped up in the second half of this year. I'm just wondering if there's any sort of further quantification that you can give as the drag that that's having and perhaps the tailwind as we go into next year as these as sort of comps normalize And indeed, whether that's going to be rolled out further across the business beyond U. K. And Ireland.
And then second question, I'm intrigued by some of the news coming out of India recently in Tamil Nadu in particular. And I'm just wondering keep If there's any sort of high level thoughts you could give us about the scale of the market opportunity there And further changes.
Hi, Joe. So look, keep We're not putting a number on the changes that we're making around RG. It's captured within our guidance. Yes. I think it is worth just reflecting that when you look at the brands that we have operating in the UK, we're particularly about SkyBest and also with Paddy Powers.
We have the very, very recreational Focus Brands in the UK. And I think we are continuously looking for additional things we can do. But I think when When I look at how the market could evolve and what the gambling commission may decide to do, I think we're very well placed. Keep Your question about whether we'll be rolling these things out further. Look, I think if you look at what we're doing, what we've done recently In Ireland, we've actually decided to introduce a number of changes, which we think are right to put in that market, which We haven't been asked to do, so for example, the moves we've taken around credit cards.
Keith? In Australia, we're undertaking a number of activities there specific to that market. I think it is important that we look at this on a sort of market by market dynamic, whether that's the focus we've got around deposit limits or the work we're doing around affordability, there are different ways we need And of course, where we get learnings from 1 past the world, we will take those elsewhere. Your question about India and Tamil Nadu is a good one. So for people on the call who aren't aware, Tamil Nadu have recently published The change in their view around legislating skilled games, which particularly positively benefits Our business there, it is a large part well, it used to be a large part of the market in India before it was temporary close down.
So again, we're excited that it comes up again, and we think we have a well placed brand to capitalize on it.
Is that just a lovely I mean is there any sort of quantification you could give us on Or views on where that might end up in impacts on different states, etcetera.
Yes. I
I think what we prefer to do is it's a relatively small business at this point. We are very excited about the prospects for it. And at a time when we think it should be on the radar, we'll certainly bring it forward. But Keith. I think it does start to set an interesting legislative framework in one state, and we hope that, that might Therefore, push out across other states, which potentially have a less positive view on skill gains.
I mean, look, Keith. We have a podium position with Junglee in the market, and we're taking share. And I will tell you that, We'll come back with more detail later. We'll leave it at that, I think.
Thank you.
Thank you. The next question is from
Just my first question on the U. S. Obviously, great detail today in the release and the presentation. We can all guess at the multiple Competitive advantages you have and the scaling advantage. Just on CPAs, you mentioned the $2.91 CPA you've seen.
Can you give any sort of comment on how this is? The CPA's have trended for the business And then how they're trending, let's say, across states. Obviously, gaming states probably different to sports, but how CPAs are panning out across different states? And then as you look forward to this NFL season, do you expect a big increase in competition? Are you
Gavin, we give you one bit of detail and you want to know the next bit. I mean, look, I think the most important thing is To look at the stat that we published, we get a 1.2x payback Yes, on those $2.91 CPAs. And the fact that in the 2nd year, and albeit this is we definitely We haven't had that many customers in the 2nd year, but the data we have for the 2nd year shows that actually the contribution we get from the 2nd year is greater than it was in the 1st year. So I think when you extrapolate that and start thinking about what that means to lifetime value of those customers are and how they compare with the CPAs, You can see why we're very pleased with the sort of the embedded value we're trading in the business and why we've been acquiring as many customers as we can, frankly, And we'll continue to do so. Realistically, Gavin, we don't obsess about CPAs.
What we obsess about is CPAs versus LTVs. And that is completely our focus. And
if
we have to spend $400 in one state and $150 in another state because that's the right CAC The LTV equation, then that's what we do. We analyze it on that level. So we are Almost the CPA is a nice cover of how we invest against the LTV.
That's perfect. Very clear. And so just one small follow-up question on the U. S. The Golden Globus DraftKings deal yesterday, did that have any implications for your New Jersey license agreement?
Keep You're referring to the fact that we use the Golden Nugget for Mark Acids. Look, this is Jarkings have acquired the online businesses from Gold Mill. So we don't believe it has any bearing on our licensing. Perfect. That's very clear.
Thank you, Jonathan.
Thank you. The next question is coming from Joe Staphaugh from Susquehanna. Please go ahead. Your line is open.
Thank you. Good morning. I wanted to ask a couple of questions if I could on the U. S. With Now the migration of your in house sports platform completed, I wanted to ask how To think about maybe the growth in products that you might be able to offer, especially this sort of football season, at least football season in the U.
S. This second half? And then the second question was, you provided a lot of data in the slide deck as well as the press release. And you indicated just this is a question on kind of sourcing new OSB customers in the U. S.
You had indicated about 40% of your OSB customers came from your daily fantasy database And you indicated about a third came from, I guess, overall marketing efforts. I was wondering if the difference In terms of the rest of customer acquisitions came from your TBG database.
So, Joe, look, to take your second question first, We have acquired, as we said, 40% of our customers from our DFS Day to day, yes, and a big chunk of marketing. The balance isn't coming from TVG. I mean, there is some I think the thing that's actually we're finding that's really beneficial is there's a lot of businesses coming to us through sort of Refer a Friend type of mechanisms. And the Spread the Love campaign has been very successful for us in terms of that type of sort of viral acquisition, Keith Which is helping us. When we think about the benefits we get On our business and having the platforms all in house, there's a multitude of them.
Keith. We had some outages in the last football season because, frankly, the volumes were pushing through the 3rd party They just couldn't cope with it. So we are hoping that now that we have everything under our own control, we'll have much better stability going into this season. We can obviously bring a lot more of our pricing in house, and it's something that I in the commentary I gave over the presentation in terms of the proportion of our products that we can Pricing put in house. And there are benefits to that in terms of our ability to then manage the models and ensure that we increase the proportion of things like cash out.
So there's lots of things that we have on the product roadmap, and Some things we wouldn't want to share with our competitors, frankly. But having it in our own gift gives us a lot more control. And also, I mean, the amount of tech effort that it's taken to actually get all of this stuff
I can appreciate that. Thank you. If I can squeeze one additional. Keith. Maybe the win rate is very high in the Q2 in the U.
S. In a seasonally weak period. Is it fair to assume that Keith? What's the right way to think about that, I guess, kind of going forward in the second half, especially maybe the 3rd quarter?
Yes, sure. About half of so we increased our structural margins very positively In the Q2 over the Q2 and the year before, a big uplift in structural margins, really driven by that same game Parley Products. So that was about half of the uplift. Then the other half was sports results, which obviously get magnified By the same day and parlay effect, so it's just a kind of a double positive there. But the more we can keep the penetration Increasing in same day and parlay, the more we can improve the structural margins.
And this is what we've seen in Other markets and in Australia, we still see the penetration going up in Sengan Parleys in the UK and I and into sort of bet builder products, which are almost more sort of do it yourself, build your own bet. So we think there's a long way to go on this. So we've certainly we're only at 1st base, I think, in your terms in terms of Where we're getting to in terms of the development of the product and the penetration into the customer base.
Thank you.
The next question is coming from Richard Stuber from Numis. Please go ahead.
Hi, good morning. Just two questions for me, please. The first question in Australia, the average players up 52%. I think you've Imply that a lot of it comes from retail customers. And do you think you've also taken any market share from the other online bookmakers over in Australia?
I have a second question on the U. S. I guess, as you sort of mentioned on the call, there's been lots of M and A activity in the U. S. In the last few weeks.
Do you think there's any good product or technology deficiencies within your FanDuel offering, which could benefit from bolt on M and A? Or is it of Outside verification with Fox or balance sheet, is that a common impediment to M and A? Ryan, it's Richard. In terms of the question, look, we've definitely taken market share in Australia. So that's a simple answer to the question.
The slightly more difficult one is precisely where those customers have come from. Now you can see a lot of those customers are sort of exhibiting behavior And profiles where we believe that they have come from using the retail monopoly service in Australia. And we definitely have benefited customers trialing our products in a way that they may not have done in the past and finding that they enjoy it and like keep the value and generosity we provide them as well as the enhanced product experience. There's almost Certainly, there's some gains in online. It's very hard to sort of gauge it when you compare This year with last year because of the fact that the sporting calendar is so different.
When we look at our business and compare it a couple of years ago, To see that their level of profitability is nearly 3x. And actually, even if you just look at the growth we've seen And customer numbers year on year, 50%. I think that the team in Australia has done a great job, and we'll hear much more from them on the 22nd September. Keep When you look at the U. S.
Business, I suspect that our continued Keith. Growth and strength in our position we have in the market is what's driving people to take M and A activity in a way to try and give themselves some capabilities to catch us. And look, we will work very, very hard. We have done ever since we first Keith decided to go hard after America in January 2018 to make sure that we have all the capabilities that we need to set ourselves up win in the market. And at this moment, we think we have everything that we need, and you can see the success What we're seeing in the business, I think there's a lot of exciting opportunities in front of us.
There's 9 new states which are opening up. We've got everything on our tech platform, 8 of those 9 states are sports focused. And the size and scale of the Fanjul organization now is at a completely different level to any of the other competitors in the market. So we're getting our flower going As fast as we can. And look, we're investing a lot of money in developing products, services and capabilities around it.
And if we identified something that we thought We need to acquire as a bolt on, we would do that. There's nothing that would get in our way at the moment. So that's great. And can I just just follow-up? Fanjul is doing phenomenally well.
Obviously, Netflix, if you could share in terms of Foxpec, how that's going and what sort of revenue that achieved in the first half or EBITDA loss? I think what we shared was that Sandoz made up 93% of the revenues in the first half, and we don't split out the EBITDA
The next question is coming from James Roland Clarke from Barclays.
Just two questions, please, I bet on the U. S. The first, are you close to finding a new CEO for the financial? And then secondly, I wonder if you could just provide a little bit of color on what you're seeing in terms of the competitive environment going into the NFL season, given the numbers of medium sized players you want to Have a good crack at the market. And should we be surprised at all if we see your highly very strong market leading
Well, James, keep If you're wanting to put your name forward for the CEO job, it's probably not you wouldn't want to do it in this public forum. But So there have been a lot of people who have come and talked to me about it. It's a very exciting job, I think. In fact, I've done this many better jobs and sports or entertainment in the United States. So yes, we've met an awful lot of people, and we are close to putting in place our long term CEO in the business.
I will say Amy has done a very good job for us since you picked up the reins in Matt. And as you can see, the business hasn't missed a beat. In terms of the competitive environment, I remember talking about the competitive intensity that we expected to see coming when we did our 1st Capital Markets Day at the Meadowlands. And we're saying that we expected it would be harder within the next season. And that's the way that we continuously think about it.
We are not at all complacent. We are completely paranoid. We're regularly waking up in the middle of the night, panicking about how people are going to attack us. And state by state, we're taking them on and working out how we continue to win. And that's the way that we're thinking about.
And look, we've never set ourselves a market share target. If we Had done, we would never have set ourselves at the levels that we find we're achieving. What we will continue to do, as Jonathan Yes, I mentioned earlier, as we're looking at it on a state by state basis and look at the amounts of money we can spend based on the returns that we're seeing from the customers. I think the one thing that we would wish that we would done was we would wish that we'd realized that the customers were going to be As valuable as it turned out to be because we've seen better levels of retention from them. We've seen high levels of cross selling from them.
And we're seeing Yes, high usage of the product and actually better margins because of the mix. So actually, the customers have ended up being more valuable than we anticipated. And It probably means we should have spent even more money initially acquiring even more customers, but we'll try to rectify our models and improve them and make sure we acquire as much business as we can. And the point at which we get to profitability or the marketing staff are all outputs for us. Keish It's the math that drives us to that point where we'll see profitability in 2023 because it will be the ratio between The number of existing customers we have and the embedded value that they have in the business, the contribution they're generating and the ratio then to the volume in new customers we get to.
And once you get past the tipping point, then of course, the business becomes profitable. That's not our focus. Market share is not our focus. It's Building as big a business with the return characteristics that we can see today as we can. And of course, we're in the nice position that we've got operating leverage in the business.
So we can add in those 9 news dates that we'll launch in, in the next 18 months without having to add huge amounts of sort of operating And clearly, there'll be extra marketing investment. We have the risk we have the pricing risk management teams. We've got big marketing capabilities. We've got big commercial functions. Yes.
Just to reiterate the point, market share is a function of 2 things. It's a function of how successful you are in acquiring customers, and that's Obviously, driven by how much you spend and how well you spend it. But the revenue is driven by the quality of your product, The retention and the stickiness of that product and therefore, the wallet share that you gain from the customers who are in the market and Our access in your product. That's why we talked so much today about the product because it is critical in winning in the market. You can acquire as many customers as you want, but you need the product to be able to make sure the customers have a great experience and stick around.
Thank you. Your next question is from Christine Xu from RBC. Please go ahead. Your line is open.
Hi. Yes, good morning. Thank you. So My first question is just on the percentage of regulated marketing. And you said in the presentation that you've seen that increase from 82% to 90%.
Do you expect that to increase more in the future? And are you sort of happy with where that is at the moment? And just a second question on the U. S, specifically on your sort of media and partnerships and partnerships with sports teams and sports leagues, etcetera. And then on Page 30, you mentioned that line, lots of deals with various teams, leads, etcetera.
And do you think you've got more partnerships versus others? Or is there something else that's giving you the higher share of voice and how important do you actually think these are, given that you've got the tangible base, etcetera.
Christine, in terms of your first question, We said naturally it would increase from 82 to 90 just because at that time we knew the U. S. Would make up a greater component. Obviously, You can see on one of the first charts in the presentation that the U. S.
Has already moved to be our effectively our 2nd biggest division by revenue in Q2. And as the U. S. Grows significantly, that will mean that mathematically, keep That will increase regulated. The other point to note is that of our unregulated markets, There are 3 of our top markets, Canada, Netherlands and Brazil, which are in the process of going towards regulation.
So Naturally, our percentage is going to move up towards 95% in the short to medium term. There will always be a series of markets whereby Keith. They are moving towards regulation and haven't regulated. So do I ever think it's going to be 0? That's a very long way off.
But I'm very comfortable with having Our pipeline of markets, except that they're not regulated. They're moving towards regulated. Yes. And look, Christine, in terms of your question about what we're keep Doing with all the sort of different media assets that we have, the deals with League of Teams and stuff. We spent more than $300,000,000 in the first half, which is greater than the revenues of most of our competitors.
So It's the scale, it's the breadth, it's the depth of the assets that we have that we'll continue to invest behind. And where we find one that works, we'll Spend more on it. So there's a lot of flexibility built into this. So there's not one of those that I'd necessarily call out. Aside from the quality of our team in the U.
S. Who are executing so well for us.
So Yes.
I think they spent the money very effectively and efficiently, and you can see that from the CPA figures and the numbers of customers who have acquired. And we will continue to innovate and push forward going into this next football season where everything starts again, really. Okay. Jo, I think we're done on questions now. Thank you very much, everybody, and I appreciate your time this morning and particularly the time listening to Jonathan and I take you through the presentation.
I think there is some very important information that we have shared in the market or shared with the market today. So if you haven't had a chance, I'd encourage you to to spend some time listening to and going through the materials. Thank you all very much for your support. Thanks.
Thank you. Thank you, everyone. That does conclude your call for today. You may now disconnect. Thanks again for joining and enjoy the rest of the day.