18 October
2024
evoke Plc
("evoke" or "the
Group")
Q3 2024 trading
update
Double-digit online revenue
growth in core markets; no change to full year
expectations
evoke (LSE: EVOK), one of the
world's leading betting and gaming companies with internationally
renowned brands including William Hill, 888 and Mr Green, today
announces a trading update for the three months ended 30 September
2024 ("Q3-24" or the "Period"). Further detail on the financial
results by division is included as an appendix to this
announcement.
Financial highlights (unaudited)
·
Group: Revenue of £417m, 3%
ahead of Q3 2023 (+4% in constant currency ("cc")), the first
quarter of year-over-year growth since Q1 2022 supported by market
share gains in key international markets. Good underlying trends
including 10% growth in gaming, partially offset by particularly
customer-friendly sports results during September, which impacted
Group revenue by approximately £17m. No change to the expectation
for the second half of 2024 to be in line with the mid-term target
of 5-9% year-over-year growth.
·
Online: Revenue growth of 8%,
with 11% growth in Core markets, which now represent nearly 85% of
the Group's online revenues when including Romania.
·
UK&I
Online: 3% revenue growth, with
accelerated trends in gaming (+12%), offset by weaker trends in
betting (-13%), where customer-friendly sporting results in
September, particularly UK football, impacted revenue by
approximately £10m.
·
International: 14% revenue
growth (+17% cc), driven by 26% growth (+29% cc) in core
international markets of Italy, Spain, Denmark and Romania, which
make up over two thirds of international revenue, including strong
trends in Romania which is now a core market.
·
Retail: Revenues -9%,
reflecting weaker than expected betting net win margins due to the
customer-friendly results (c.£5m impact), and previously indicated
market share losses in gaming. New Retail managing director started
in September and identified and actioned a series of measures to
improve trading in the short-term. Rollout of over 5,000 new gaming
machines from October, and on track to complete the entire estate
within Q1 2025.
Strategic highlights
In line with the plans laid out at
the H1 2024 Results in August, the Group is executing a turnaround
in short-term trading with clear priorities and decisive actions,
while simultaneously executing against its growth strategy by
enhancing its competitive advantages to drive significant mid and
long-term value creation. During the Period the Group made
important progress against these plans:
1.
Drive profitable and sustainable revenue
growth
· Strategic focus on Core markets delivering strong results with
market share gains across several core markets. Italy revenue
growth was 31% cc with the Group taking a podium position in the
online casino market for the first time during Q3 2024, with
888casino now the clear market-leader in the casino-first segment
in Italy.
· Positive customer reaction to a series of major product
launches including all-new Bet
Builder and Impact
Sub, and a new William Hill Vegas app with an extended range
of games and promotions. Improved functionality on William Hill app
with a relaunched home page and simpler navigation resulting in
improved ease of use.
· More
effective and efficient approach to player bonuses and promotions,
including launch of all-new customer engagement platform at the end
of the period, which provides the capability to deliver a
step-change in the personalisation of customer
communications.
· Enhanced brand strength, for example William Hill offered more
top prices on horse racing than any other major bookmaker
throughout June, July and August, as verified by Oddschecker, and
William Hill launched the Top
Acca for the new football season in August, giving customers
access to the most popular acca in one click.
· All
the above driving strong progress in underlying key value drivers,
with Average Revenue Per User (ARPU) +8% despite the sports results
headwind, driven by focus on core customer cohorts to drive
retention, increase share of wallet, and improve player
values.
2.
Improve profitability and efficiency through
operating leverage
· Marketing costs reducing sequentially in line with plans while
still achieving strong online revenue growth. Improved optimisation
being supported by a new MMM (marketing mix model) that enables
quick decisions to scale up and down marketing channels based on
near real-time data
· Cost
savings being delivered in line with plans, with cash cost savings
of £23m year-to-date through highly effective new operating model,
with a reduction in layers in the business from 10 to six, and a
streamlined office footprint including significantly expanding
capabilities in Manila to enable further business process
outsourcing and automation.
· Strategic initiatives strengthening overall capabilities at
efficient cost, with Operations 2.0 initiative accelerating
investments in automation and artificial intelligence across all
group functions.
3.
Deleverage through disciplined capital
allocation
· Acquisition of winner.ro completed in early October 2024,
building a market-leading position in Romania and the creation of
evoke's fifth core market, enhancing earnings and reducing leverage
from 2025 onwards. Strong trading trends in Romania across both 888
and Winner brands with customer migration in Q4 2024 to unlock cost
and revenue synergies. Targeting a podium position in the market
with a dual-brand strategy operating from a single and
cost-effective platform.
· Conclusion of sale of New Jersey and Virginia businesses with
full exit from US B2C now expected in Q1 2025 with the sale of
Colorado and Michigan.
Outlook
· No
change to previously issued guidance for H2 2024 revenue growth of
5-9%, and Adjusted EBITDA margin expected to improve to
approximately 21%.
· No
change to existing FY25 expectations, including Adjusted EBITDA
margin of at least 20%, with unchanged medium-term targets of 5-9%
revenue growth per year, c.100bps of Adjusted EBITDA Margin
expansion per year, and leverage of below 3.5x by the end of
2026.
Per
Widerström, CEO of evoke, commented:
"I
have now been in position for a year, and I am pleased that the
turnaround of the business is working, with the first quarter of
revenue growth since Q1 2022 and positive underlying trends. We are
achieving our plans to improve trading in the short-term, while
simultaneously radically transforming the Group's capabilities for
the long-term.
Our online business is a clear growth engine for the Group and
we saw a return to double-digit online revenue growth in our core
markets in Q3 2024 underpinned by our focused market strategy and
supported by important product investments and the results of our
clearer customer value proposition and
segmentation.
I
am pleased to report a strong quarter of progress as we continue to
implement our strategy for success and deliver our value creation
plan. We are moving decisively and at pace to position evoke for
long-term growth, and I look forward to providing further updates
about our progress in the coming months."
Enquiries and further information:
|
evoke Plc
|
+44(0) 800 029 3050
|
|
Per Widerström, CEO
Sean Wilkins, CFO
Vaughan Lewis, Chief Strategy
Officer
|
|
|
Investor Relations
James Finney, Director of
IR
Media
|
ir@evokeplc.com
evoke@hudsonsandler.com
|
|
Hudson Sandler
Alex Brennan / Hattie Dreyfus / Andy
Richards
|
+44(0) 207 796 4133
|
About evoke Plc:
evoke plc (and together with its
subsidiaries, "evoke" or the "Group") is one of the world's leading
betting and gaming companies. The Group owns and operates
internationally renowned brands including William Hill, 888, and Mr
Green. Incorporated in Gibraltar, and headquartered and listed in
London, the Group operates from offices around the
world.
The Group's vision is to make life
more interesting and its mission is to delight players with
world-class betting and gaming experiences.
Find out more at: https://www.evokeplc.com
Important Notices
This announcement may contain
certain forward-looking statements, beliefs or opinions, with
respect to the financial condition, results of operations and
business of evoke. These statements, which contain the words
"anticipate", "believe", "intend", "estimate", "expect", "may",
"will", "seek", "continue", "aim", "target", "projected", "plan",
"goal", "achieve", words of similar meaning or other forward
looking statements, reflect evoke's beliefs and expectations and
are based on numerous assumptions regarding evoke's present and
future business strategies and the environment evoke will operate
in and are subject to risks and uncertainties that may cause actual
results to differ materially. No representation is made that any of
these statements or forecasts will come to pass or that any
forecast results will be achieved. Forward-looking statements
involve inherent known and unknown risks, uncertainties and
contingencies because they relate to events and depend on
circumstances that may or may not occur in the future and may cause
the actual results, performance or achievements of evoke to be
materially different from those expressed or implied by such
forward looking statements. Many of these risks and uncertainties
relate to factors that are beyond evoke's ability to control or
estimate precisely, such as future market conditions, currency
fluctuations, the behaviour of other market participants, the
actions of regulators and other factors such as evoke's ability to
continue to obtain financing to meet its liquidity needs, changes
in the political, social and regulatory framework in which evoke
operates or in economic or technological trends or conditions. Past
performance of evoke cannot be relied on as a guide to future
performance. As a result, you are cautioned not to place undue
reliance on such forward-looking statements. The list above is not
exhaustive and there are other factors that may cause evoke's
actual results to differ materially from the forward-looking
statements contained in this announcement. Forward-looking
statements speak only as of their date and evoke, its respective
parent and subsidiary undertakings, the subsidiary undertakings of
such parent undertakings, and any of such person's respective
directors, officers, employees, agents, affiliates or advisers
expressly disclaim any obligation to supplement, amend, update or
revise any of the forward-looking statements made herein, except
where it would be required to do so under applicable law. No
statement in this announcement is intended as a profit forecast or
a profit estimate and no statement in this announcement should be
interpreted to mean that the financial performance of evoke for the
current or future financial years would necessarily match or exceed
the historical published for evoke.