Evoke (EVOK) Trading Update summary

Trading performance and financial update

• H1 2024 group revenue was £862m, down 2% YoY but up 4% vs H2 2023, with Q2 revenue stable at £431m and UK & Ireland online returning to growth (+1% YoY).

• UK retail revenue fell 8% YoY, remaining stable sequentially, with gaming machine market share at 19% and plans to upgrade the estate by Q1 2025.

• International revenues returned to positive growth in Q2, with double-digit growth in core markets (Italy, Spain, Denmark), now 60% of international revenue, but declines in optimize markets and US B2C exit offset gains.

• Adjusted EBITDA for H1 2024 is expected at 13-14%, approximately £35m-£40m below plan, impacting FY24 expectations.

• Leverage temporarily above 6x at H1 due to transformation, with a clear path to reduce below 3.5x by end of 2026.

Strategic actions and operational changes

• Commercial leadership changes, new executive team, and improved ROI tracking implemented after lower-than-expected marketing returns, especially in UK online.

• Shifted focus from sub-optimal customer segments and reactive tactics to consistent, long-term brand and customer value propositions.

• Pivoted from in-house gaming cabinet development to third-party solutions after poor test results; rollout of 5,000 new machines begins Q4 2024.

• Marketing spend to be £35m-£40m lower in H2, with cost savings of £30m in FY24 and a strong pipeline of product initiatives to drive growth.

• Group rebranded to evoke plc, with new values, identity, and refreshed Mr Green and William Hill brands.

Strategic transformation and competitive positioning

• Major transformation underway, with bold changes to enhance operational efficiency and profitability, including a new operating model and £30m in cost savings.

• Focus on operational excellence through data, AI, automation, and new hires from leading AI-powered businesses.

• Leadership team restructured, with 9 of 11 roles new since October 2023, to build a winning culture and future-proof the operating model.

• Brand repositioning for Mr Green completed; William Hill repositioning well advanced, with new products like Bet Builder gaining traction.

• Strategic framework emphasizes operational excellence, data-driven automation, and customer lifecycle management.