Flutter Entertainment (FLUT) Q4 2022 earnings summary

Executive summary

• Revenue rose 27% reported to £7,693m, while Adjusted EBITDA increased 4% to £1,045m; pro forma Adjusted EBITDA fell 5%, or rose 9% excluding £160m of regulatory and safer-gambling headwinds.

• US expansion and the Sisal and tombola acquisitions drove scale; average monthly players grew 26% to 10.2m.

• Statutory net loss was £305m, reflecting £976m of depreciation and amortisation and £641m of separately disclosed items after tax.

Financial highlights

• Revenue was £7,693m, up 27% reported and 22% at constant currency; sports revenue rose 27% and gaming revenue 28%.

• Reported EBITDA increased 27% to £918m; Adjusted EBITDA grew 4% to £1,045m, with Adjusted EBITDA margin down 300bps to 13.6%.

• Adjusted operating profit declined 9% to £675m; Adjusted profit for the period fell 26% to £336m and Adjusted basic EPS declined to 189p from 252.7p.

• Statutory operating loss was £60m and net loss £305m, improving from £63m and £412m respectively in 2021; basic loss per share was £1.708.

• Adjusted free cash flow was £628m versus £625m; net cash from operating activities rose to £1,297m from £775m.

Outlook and guidance

• First eight weeks of 2023 trading were in line with expectations; the US division remained on track for full-year EBITDA profitability in 2023.

• 2023 capital expenditure guidance was £480m-£500m; Adjusted depreciation and amortisation was expected to be ~£480m.

• Expected weighted average cost of debt was 5.6%; the 2023 effective tax rate for operations outside the US was forecast at 25%-27%, versus 22.9% in 2022.