Entain PLC (GMVHF) (H1 2026) Earnings Call Highlights: Online Growth and Strategic Discipline ...

Q & A Highlights

Q: You reiterated the $500 million adjusted cash flow target by 2028 despite the planned exit from CEE and a more cautious BetMGM midterm outlook. Can you bridge the key contributors from 2026 expected cash flow to the 2028 target? A: Michael Snape (Group CFO): The disposal of CEE is broadly cash neutral when factoring in reduced interest costs. Despite the change in BetMGM's medium-term outlook, we remain very confident in our ability to generate cash and reach the $500 million target.

Q: Can you help us understand the balance of internal action across OpEx and CapEx and your posture on additional portfolio actions to bring down leverage? A: Michael Snape (Group CFO): The best way to generate cash is through growth, but there is a huge cost optimization opportunity. We have already announced the removal of 500 roles, which is about changing our model, not just cutting costs. We see a big opportunity to drive synergies, remove duplication, and simplify. On CapEx, we have revised guidance down, not as a reduction in investment, but by leveraging AI to be more cost-efficient and faster. Stella David (Interim CEO): We are not beholden to the current shape and size of the portfolio. We are focused on unlocking value, but there is no fire sale. The CEE deal is a good example of adding value.

Q: You delivered ahead of expectations at H1 but reiterated guidance. Is this just marketing phasing or conservatism? Also, online NGR growth is tracking at the top end of guidance at 7% constant currency. Is there something to be mindful of in H2? A: Michael Snape (Group CFO): I wouldn't call it conservatism, but a balanced view. Marketing phasing plays a part as we spent less in H1 than anticipated, but we are increasing marketing spend overall to exit '26 into '27 with velocity. The UK tax steps up in H2, creating disruption we are taking advantage of, but we can't predict the competitive environment. Stella David (Interim CEO): We started well and continued well into Q3. However, we want to avoid the situation where margins drop in November and December due to volatility. We have more volume in BetBuilder now, which is higher margin but more volatile, so we aim for consistency and repeatability.

Q: In Brazil, you have emphasized not pursuing market share at any cost. What market share have you maintained, and do you think Brazilian growth will improve in H2 given easier comps? A: Stella David (Interim CEO): We have maintained market share in Brazil. It is a complicated market going through regulatory teething problems. We are taking a disciplined approach to profitability while improving player journeys. Michael Snape (Group CFO): We are not chasing growth for growth's sake and still make a profit contribution in Brazil. Despite tight investment, we have maintained market share. There is opportunity for recovery in H2, but the environment remains difficult with the election in October creating more noise. We will keep doing what we're doing with a disciplined focus.

Q: In Italy, it seems you are losing some market share in online. Do you have any takes as to why, given your retail advantage? A: Stella David (Interim CEO): Our iGaming growth has been strong at double-digit, but sports was less strong in H1. We are revitalizing the Eurobet brand with the AS Roma sponsorship and a new partnership with Napoli. We have a new leadership team attacking the challenges. We have plans to drive future growth, and we have packed additional marketing investment into our numbers to get sales back into more competitive growth in 2027.

Q: On the cash flow target, is your confidence in hitting the 500 million target precisely stemming from the cost opportunities you mentioned? A: Michael Snape (Group CFO): It starts with confidence in growing the business, but we need to convert that growth into cash. That's where the cost piece comes in. We see significant opportunities to optimize the cost base across all parts of the P&L and to optimize CapEx, either by using AI or other means. We are confident about that number.

Q: Regarding the capital structure, will the proceeds from the CEE stake sale be used to reduce debt, and how are you planning to address 2028 debt maturities? A: Michael Snape (Group CFO): The proceeds from the 20% sale will go fully to debt reduction, and we will look to refinance and improve our maturities. When we sell the rest of CEE, we will probably put some of that to debt as well, and the residual would be returned to shareholders. When asked for a specific timeline, the response was "Watch this space."

Q: Can you expand on the thinking behind the FY26 EBITDA guidance, given the strong H1 performance? A: Michael Snape (Group CFO): We've had a really good first half and are ahead of expectations, but there's no hubris. We know we have to earn it again in H2. Marketing phasing plays a part, and the tax step-up in H2 creates disruption in the UK market. We are taking advantage of that to gain market share, but we can't predict the competitive environment. We believe our guidance represents our best estimate, not just conservatism.

Q: Regarding the 5% to 7% online growth guidance for next year, can international still deliver in that range given the Austrian government's reform and Spain's cross-operating limits? A: Stella David (Interim CEO): We have made significant progress in growth across the portfolio. Australia is in healthy double-digit growth due to operational changes. New Zealand is in double-digit growth with casino regulation starting in early 2027. Canada and Spain are also in double-digit growth. On Austria, long-term it's an opportunity as we have a strong brand, and any hiccup in timeline should be taken in context of its scale versus other businesses. Combined with product improvements like BetBuilder, we have real momentum points that give us confidence in those growth rates.

Q: Is the World Cup benefit in H2 versus H1 quite similar? A: Stella David (Interim CEO): We had a nice benefit in H1 with a different profilemore goals in H1 which was good for volumes. In H2, there were fewer goals but stronger margins due to more nil-nil draws. The bigger win from the World Cup is that first-time depositors doubled compared to the 2022 World Cup. A lot of play was on BetBuilder products, which

For the complete transcript of the earnings call, please refer to the full earnings call transcript .