2019 Final Results

William Hill PLC (LSE: WMH) (William Hill or the Group) announces its final results for the 52 weeks ended 31 December 2019 (the period or 2019). Comparatives relate to the 53 weeks ended 1 January 2019.

Financial Results

• Group net revenue fell 2% to £1,581.7m
• Adjusted operating profit² from existing operations fell 37% to £147.0m, ahead of management expectations, following the implementation of the £2 stake limit
• Exceptional charge and adjustments of £134.1m, primarily in relation to the closure of shops and redundancies, leading to a statutory loss before tax of £37.6m
• Operating cash flow fell 7% to £183.0m reflecting the 37% reduction in adjusted operating profit², offset by the reclassification of lease expenses under IFRS 16
• Net debt for covenant purposes⁴ increased, as anticipated, to £535.7m, reflecting the acquisition of Mr Green, the impact on adjusted operating profitp2 of the £2 stake limit and disciplined investment in the US expansion, resulting in net debt/EBITDA of 2.4x
• Full year dividend of 8p is confirmed

Operational highlights

• Safer Gambling
  • Committed to protecting our customers; signed up to the Safer Gambling Commitments in November 2019, significant increase in accounts setting deposit limits
  • Self-regulatory measures implemented in 2019 including the ‘whistle-to-whistle’ advertising ban and the voluntary levy for research, education and training
• Online
  • UK maintained market share; three consecutive quarters of growth⁵ in line with the market
  • UK absorbed £13m impact from the increase in Remote Gaming Duty
  • International net revenue fell 3% on a pro forma basis⁶, impacted by regulatory headwinds and legacy product
  • Mr Green performed in line with expectations and achieved cost synergies of £4m
• Retail
  • Decisive response to the £2 stake limit, closing 713 shops
  • Net revenue fell 13% on a like-for-like basis⁷, at the better end of our expectations
  • Sportsbook staking increased 6% with average weekly staking on SSBTs increasing 17% both on a like-for-like basis⁷
• US
  • US net revenue increased 38%, capturing nationwide market share of 24%
  • US Expansion net revenue tripled and Nevada grew for the seventh consecutive year
  • New purpose-built digital platform live; 55% of all US wagers handled through our online channels
  • Preparations to incorporate the operation of Caesars and CG Technology sports books are well underway which we anticipate will occur in the first half of 2020, pending regulatory approval
  • CBS media partnership established; grants exclusive rights to promote William Hill across CBS Sports’ digital properties, a unique integration of sports betting, media, product and technology

Ulrik Bengtsson, Chief Executive Officer, commented:

"2019 was a year of transition during which we executed on our ambition to diversify internationally with the acquisition of Mr Green and the continued strong growth of our US business. The Group delivered a strong operating performance, ahead of our expectations and against a challenging regulatory backdrop.

"We move into 2020 in a stronger position. Almost a quarter of revenue is now generated outside the UK compared to 15% in 2018. We made positive progress with our digital platform, launching our purpose-built platform in the US and product developments in the Online business in 2019. We will invest in our proprietary technology as we continue to improve the competitiveness of our customer offering. We have also made great progress embedding a culture of safer gambling across the Group.

"This is an exciting time to be William Hill’s CEO. Our industry is evolving and this brings great opportunities, underlining the importance of our efforts to reposition the business. We look forward to building on these foundations with a renewed focus on customer, team and execution."

Notes:

1. Both the statutory and adjusted results include the performance of Mr Green since the acquisition completed in January 2019.
2. Adjusted operating profit/loss is defined as profit/loss from continuing operations before interest and tax, excluding exceptional items and other defined adjustments. Further detail on adjusted measures is provided in note 3 to the financial statements within our 2019 Annual Report.
3. Basic EPS is based on an average of 873.0 million shares for 2019 and an average of 857.0 million shares for 2018. Adjusted EPS is based upon adjusted profits after tax.
4. Net debt for covenant purposes and EBITDA for covenant purposes are non-statutory measures. The basis of the calculation is as described in note 25 to the financial statements within our 2019 Annual Report, with the addition of the EBITDA of Mr Green for the full rolling 12 month period.
5. Reported on a pro forma basis, assuming Mr Green was consolidated into the Group at the end of January 2018 and also adjusting Q4 2018 so that it is on a 13 week basis given 2018 was a 53 week period.
6. Where pro forma results are stated, this assumes Mr Green was consolidated into the group at the end of January 2018, in order to provide a more meaningful comparator period. Further detail on pro forma results are provided in note 18 to the financial statements within our 2019 Annual Report.
7. Where like-for-like (LFL) results are stated, this adjusts the 2018 comparative for shops closed during 2019.
8. Broker research, CIA country profiles, U.S. Census Bureau, H2 Gambling Capital.
9. Results in the Online operating review table are presented on an adjusted basis including Mr Green’s results post acquisition on 28 January 2019.
10. The US Existing business has now been simplified to contain only revenues from Nevada, with all revenues from Delaware now recognised in US Expansion. 2018 results are restated to reflect this change.
11. 24 states is contingent on the completion of the acquisition of Caesars by Eldorado. Excluding the inclusion of Caesars, William Hill US has access to 18 states. When referring to states this includes Washington D.C.

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About William Hill 

William Hill PLC is one of the world's leading betting and gaming companies, employing c12,000 people. Its origins are in the UK where it was founded in 1934, and where it is listed on the London Stock Exchange. The majority of its £1.6bn annual revenues are still derived from the UK, where it has a national presence of licensed betting offices and one of the leading online betting and gaming services. William Hill's European Online business is headquartered in Gibraltar and Malta, and is licensed online in 12 countries following the acquisition of Mr Green & Co AB in January 2019. In 2012, it established William Hill US with a focus on retail and mobile operations in Nevada and became the largest sports betting business in the US. Following the ruling in May 2018 by the Supreme Court that the federal ban on state sponsored sports betting was unconstitutional, William Hill US has expanded and continues to expand as new states regulate sports betting. It is now operating in nine states: Delaware, Indiana, Iowa, Mississippi, Nevada, New Mexico, New Jersey, Rhode Island and West Virginia. Eldorado Resorts, Inc. currently owns shares representing 20% of the share capital of William Hill US Holdco, Inc., the holding company of William Hill US.

Cautionary note regarding forward-looking statements

Cautionary note regarding forward-looking statements This announcement includes statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements can be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "anticipates", "expects", "intends", "plans", "goal", "target", "aim", "may", "will", "would", "could" or "should" or, in each case, their negative or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout these results and the information incorporated by reference into these results and include statements regarding the intentions, beliefs or current expectations of the directors, William Hill or the Group concerning, amongst other things, the results of operations, financial condition, liquidity, prospects, growth, strategies and dividend policy of William Hill and the industry in which it operates. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future and may be beyond William Hill's ability to control or predict. Forward-looking statements are not guarantees of future performance. The Group's actual results of operations, financial condition, liquidity, dividend policy and the development of the industry in which it operates may differ materially from the impression created by the forward-looking statements contained in these results and/or the information incorporated by reference into these results. In addition, even if the results of operations, financial condition, liquidity and dividend policy of the Group and the development of the industry in which it operates, are consistent with the forward-looking statements contained in these results and/or the information incorporated by reference into these results, those results or developments may not be indicative of results or developments in subsequent periods. Other than in accordance with its legal or regulatory obligations (including under the Market Abuse Regulation (596/2014), the Listing Rules, the Disclosure Guidance and Transparency Rules and the Prospectus Rules), William Hill does not undertake any obligation to update or revise publicly any forward-looking statement, whether as a result of new information, future events or otherwise.

Download the Full 2019 Final Results in PDF format