Evoke plc (EVOK) Earnings Call Transcript & Summary

So thanks, everyone, for coming. This is 888 Holdings Capital Markets Day. We've got people online as well. So they're waiting for us to make a start. So I'm going to hand straight over to our CEO, Itai Pazner, who's leading off the session. Thank you.

Thank you, Vaughan. And good afternoon to everyone here in London. Welcome to our 2022 Capital Markets Day. Both of you who are here with us in London, and I see many familiar faces we haven't seen for a while, but also to other people who are joining us online. So I'm Itai Pazner, to those of you who don't know me, the CEO of 888 since 2019, having been with the group for over 20 years now. And as you can see on the agenda on Slide 3, we've got a packed afternoon ahead of us, and it gives me great pleasure that you will be able to hear not only for myself today, but also from some of the management team that are here with us in the event today. In terms -- just in terms of the logistics of the event, we'll leave plenty of time at the end for questions. So if you can keep the questions till the end. And we will also be happy to answer more informal questions over the -- after the event over some drinks and canopies that will have in an after event. And we'll also -- to leave plenty of time for the England versus Wales game that coincidentally, we have a special offer on William Hill today for that match, which has came as first score at [ 7 to 2 ]. And I'd highly recommend to everyone that doesn't have the app to actually download the app if you can do it after the presentation and concentrate on the presentation. But I think you'll see firsthand what we mean when we speak about product and content leadership. So moving on to Slide 4. Today, we're going to lay out a highly focused strategy that we're confident will deliver superior shareholder returns. You'll hear from some of the senior management in the team, an incredibly strong team that we have with us here today that I have personally handpicked from across William Hill, 888 and from externally. In addition to the speakers, we have Mark Skinner here with us today, our Chief People Officer; and Elena Chambers, our Chief of Staff, that will be with us in the event after and you can ask them questions as well. And on Slide 4, you can see all of the senior leadership team that we have. It's a team with a broad experience and in-depth expertise in the sector as well as a wide range of capabilities. I believe this is exactly what we need in order to deliver our plans. We're building a strong team culture that brings together the best of both of these businesses. I am determined to ensure that the sum of these great historic businesses creates a combination that is bigger, stronger and better together. Now turning over to Slide 5. So this is just a reminder of why I'm so excited about the combination of 888 and William Hill. So 888, as you know, is a technology and gaming business by DNA with a scalable global platform and huge digital capabilities. William Hill is a bookmaker by DNA with an iconic brand that's instantly recognized across the U.K. The combination of these complementary businesses gives us a really powerful opportunity. And since coming together in July, everything that I have found has only strengthened my view about the power of this combination and the strategic rationale that has led us into the deal. The brand recognition and customer loyalty to the William Hill brand in the U.K., which is second to none. The enhanced customer experience of William Hill sports betting products in U.K. -- in the U.K. and the trading capabilities that we have at William Hill. The strong operations and customer support capabilities and the friendly and professional and passionate customer fronting retail teams that we have and the quality of the William Hill retail estate. The overall quality of the teams and the colleagues across William Hill has been very reassuring, and combining all of these with 888's gaming assets, technology, digital marketing and data capabilities has only enforced that our decision to acquire William Hill International and combine the two companies together, to become a global powerhouse in our was the right strategic path for our group. So we are a much larger company now with improved diversification, stronger position in our core markets and access to a suite of world-class brands and a leading retail presence in the U.K. And as we leverage our proprietary technology, the huge amount of combined experience and talent across the group, we feel confident about unlocking the potential from this combination. Now over to Slide 6. And this slide just emphasizes the scale that we have now and the power of the combination. As we go through the presentation today, the team will expand on how we are focused on a successful integration and delivering on the promise of this combination and how our enhanced scale will secure a long-term leading position and create value. Turning to Slide 7. So here, you can see an overview of what the business looks like on a pro forma basis today. One of the major integration tests that we've already delivered is setting the new operating model for the future. Our operating model is built around two geographical businesses, one being the U.K. and the second one, the international business. With a strong central service unit that supports the local business units. This model gives us a combination of scale benefits from our central functions and proximity to our key markets and the local customers. This will also allow to drive market share gains looking at -- and looking at the size of the business today just in terms of the numbers that we generate in the different parts of the business. We generate over GBP 700 million of online revenue in the U.K. and Ireland. We are the #3 by revenue in the U.K., and #4 in Ireland. We are just over GBP 500 million of U.K. retail revenue, the #2 operator by revenue in the U.K. And we generate a little over GBP 600 million of revenue from our international markets with leading positions in markets like Spain, Italy and Denmark and the significant future growth opportunities in further markets. We also generated around GBP 20 million in the U.S., where we will generate growth at a relatively low cost base. So we are a diversified business now and 50% of the revenues are coming from online gaming, just under 30 from retail and 20% from online bedding. So turning to Slide 8. And as I mentioned, this combination is incredibly attractive from a strategic perspective and we're confident that it will deliver strong shareholder returns. However, since announcing this acquisition, there have been some material external challenges and changes that we must address. In the short term, we are facing some significant challenges, and these have led us to adapt our approach towards the integration. Right now, we have around GBP 1.8 million in debt. We are determined to reduce that level of debt. The cost of the debt is also higher than what we had planned as the interest rates and debt markets have moved against us since announcing this deal. Therefore, deleveraging is our top priority. We also have a combination of three platforms across the group, which is a 888 platform, the William Hill platform and the Mr Green platform. In addition to this, in some of the markets the brands that we have are actually competing against each other, and this fragmented approach and duplicated operating tech structure means that our margins are lower than peers, and that's something that we must address and change. We have a strong plan to address all of this with a disciplined approach to investment in our markets, both where we invest and actually how we invest in terms of our different brands. We are also incredibly focused on cost efficiency with a clear commitment to building a truly scalable business by removing duplication functions. Today, we are increasing our synergy target from GBP 100 million to GBP 150 million and Yariv will expand on that next after me. In the medium term, we also face challenges with integration, focus and execution, which are natural in this kind of combination. One of the advantages of our global scalable platform is that we can operate in almost any market that we want anywhere, but that also comes with a potential risk, which is lack of focus and discipline. And we are addressing this risk through a very structured market framework and building a slim down and streamlined business that is focused on execution in our key markets. And Vaughan will expand about that shortly as well. So over the longer term, we face a number of ongoing challenges as in the industry, and these are not challenges that are unique to us, but there are some longer-term risks around regulations and fast consolidations in different markets, and we are addressing this by building a significant scale, both within our business operations and at the local level in our key markets, where we're targeting to be a top three market position across our core and growth markets to build a sustainable and high-margin business that is resilient to future risks in the industry. So moving over to Slide 9 and having outlined our challenges, I'm pleased to say that we do have a strong plan to address all of these issues. I'm confident that our plan will build a much more profitable business. This plan will set us up for the next decade of growth. Our integration will take us about two years. And this is how we're thinking about the different phases of the business. On this slide, what you can see is our evolved strategic road map, which is based on three different phases: our position -- our current position, our plan, and the potential of this company. Our current position is a newly combined business. Like I said, we have multiple operating structures, multiple tech platforms and brands that are sometimes competing against each other. This drives inefficiency and EBITDA margins that are just not high enough. Our plan over the next couple of years is to focus on integration and deleveraging. This will create a higher margin, more nimble business. This robust plan will unlock huge potential in the future. Our proprietary tech stack available operations will allow us to compete at a lower cost, and our world-class brands and marketing and customer excellence will drive market share gains in our target markets. Integration and our tech migration are critical to our vision, and these are my personal top priorities. Culture and the team are critical to getting this part right as well, and we're building a powerful, agile and engaged and unified team culture. But rather than telling you more about this culture, I'll be happy to share with you a video that outlines how we're doing this with our teams. [Presentation]

Okay. So another significant enabler, apart from our people and our culture and the key focus for us is our technology platform. And probably one of the most exciting things that we are doing is building a unified technology platform for the group. This will be a best-in-class product and content platform with all the knowledge and capabilities that we gained across 888 and William Hill. On Slide 11 here, you can see the outline of the decisions that we took to build our future platform. For the past five months and since completion, we have been working hard on our tech migration plan. We analyzed each and every aspect of both product platforms, ranking them against each other and criteria for each core pillar of our customer experience. At 888, we have a long history of developing our own technology and already operated a fully proprietary system that have scaled across almost 20 regulated markets. This led us to our first major decision of the integration project, which is 888, is going to be the core platform, and we will build on to it, incorporating some of the market-leading components that we're getting from William Hill. Two of these key elements that will come from William Hill are the global trading platform that comes from William Hill, and the retail technology platform. The trading platform is a first-class fully in-house and offers significant benefits to enhance the current 888sports platform. We have there more markets, more capabilities, more accurate pricing and access to a vastly experienced in-house team of traders that drive higher margins to our sports books. Taking this key decision early about the platform, it was critical as it accelerates and it focuses the entire tech road map and also clarifies what synergies we can deliver and when we can deliver them. And the first market that we will migrate over to the 888 platform will be Mr Green in Sweden in the first half of 2023, and Nir Hakarmeli who's here with us we'll talk to you about the benefits of that migration to the 888 platform. We're planning to complete all of the platform migrations within around two years. As we migrate to our future platforms, we get to significant benefits from this migration. Firstly, there's a big cost advantage as we are no longer running parallel technology stacks, and we are leveraging our proprietary technology. Secondly, there is a big revenue opportunity as we're combining the best-in-class product and content across betting and gaming over all of our different brands in the group. A successful integration and migration is my #1 priority. But to support me with this, execution of this plan, I'm delighted to say that we have just recruited Anna Barsby as a Chief Product and Technology Officer. So Anna joins us with a huge experience with complex integration and migration from her past and is already making great progress with our tech colleagues from across the group. As we are creating a unified tech stack, our new business will leverage from a wide range of global functions, including customer service, payments and digital market -- marketing. This model gives us a huge scale benefit, while at the same time, enabling us to compete hard and cut through in our local markets. On Slide 12, I'll outline an example of how the combination will allow us to prove the customer experience and also to deliver cost savings at the same time. So by streamlining our operations and building out further automation, we are able to reduce the number of times that customers need to contact us. And when they do still need to contact us, we can deal with their requests more quickly and turn this into a positive experience. These better customer experiences help us drive ongoing improvement in our customer satisfaction to our Net Promoter Score, and this increases our customer retention, it drives higher LTVs and it increases our brand recommendation between the customers and their friends, which also results in lower CPAs. So I want to walk you through all of the statistics on these pages, but what I will say is that we know that we can provide a much better customer service and we know that we can do this at a much lower combined cost base for the organization. Our integration plan will follow the same road map that William Hill has followed for the last couple of years in terms of customer support. So firstly, using more automation in order to increase speed, this is critical. Improved customer experience and drive cost savings. For example, the state-of-the-art chat bot handles the equivalent of 40 members of staff per day, freeing up our colleagues to deal with the higher value services and save costs in the same time. Secondly, consolidating customer service centers to drive capability concentration and economies of scale in our customer support functions. Thirdly, unifying back-office systems, so all brands globally can be served off one platform. This combination is all about better customer service experiences at a lower cost of production. This is just one example of the benefits of the scale of this combination. On the next slide, I'll outline how the combination will also drive revenue growth for us. But just before that, I want to share with you a short video that shows how effective our chat bot is with dealing with high volume requests like identity verification and event cancellations, which are two events that happen to us as a business from time to time. [Presentation]

So as you saw our scale benefits will drive better customer services at a lower cost, but our plans are not just about cost cutting. There's huge competitive advantages that we are strengthening in the group, and these support our revenue growth plans. On Slide 14, there are just a few examples of the revenue growth opportunities that we've identified from this combination. So starting within sports, William Hill trades over 50,000 more in-play football markets each year than 888sports. Expanding the range of the options at 888sports and reducing the in-place suspension through using our in-house algorithms will drive higher engagement and revenue with our 888sports customers. On the gaming side, we're fortunate to have one of the best in-house casino game studios, which is Section8, which will also be available to William Hill and Mr Green customers next year. Section8 is the second largest content provider to the 888Casino out of more than 50 global providers, and it represents over 20% of the R&D revenue outside of Live Casino in 888Casino. Integrating this into William Hill will enable millions more of players to access these best-in-class games, driving both revenue upside, but also reducing our third-party costs at the same time. At 888, we also have advanced data science and AI capabilities to optimize the gaming journey and offer the most relevant content to players. Think of this like an Amazon or a Netflix from a player's early activity. We know exactly what the games that they are likely to enjoy. And we bring these games in front of the players at the appropriate time and in the appropriate place in their customer journey. We're not the only ones who do this, of course. But as you can see from the slide here that our in-house developed models consistently outperform the best third-party models you can buy. And that's all due to the great data science and algorithm building capabilities that we have in-house. So while we're focused on integration and synergies, that doesn't mean that we're stopping with our product innovation initiatives in the group. And on this slide, you can see an example of a new product that we launched recently, our daily wish wheel. Each day, players get a free spin on the wheel and can win either free spins, cash or other prices. This really supports our recreational player strategy and offer our customers another layer of engagement and excitement on a daily basis. This wheel is also hosted by one of the most popular Section8 characters, who's supposed to be on the screen. And is really a smash hit series that people can only play on 888casino. We have three great slots, including a megawatt slot version and a scratch card version with more games under the venture on the soon. So these are all developed by our great in-house studio, and they outperformed games from across all of the world and all of the different big studios that they are competing with on the 888 platform. Our Millionaire Genie will gives players a reason to come back to us every day, but it's also a reminder of our unique high-quality games, all of which will soon will be available for both William Hill and Mr. Green. So turning to Slide 16 and just to summarize my focuses and priority. So the strong strategic rationale of the deal is unchanged. Our combined scale will give us more capabilities at a lower cost of production and will have leading brands to outcompete in our focus markets. However, we know we're facing some significant near-term challenges. We have a significant amount of debt. So deleveraging is a top priority for the group. But we also know we have a very solid plan and strong business to face these challenges and realize our potential. We're going to do this through a clear strategic priorities of integration and market focus. This will drive superior shareholders creation. As we execute on our plan, this will unlock huge future growth potential. We are going to build a stronger unified business with an improved balance sheet. And as we spoke a lot about the importance of deleveraging. I'm now going to hand over to Yariv to discuss what the plan looks like from a financial perspective. So Yariv, over to you.

Thanks, Itai. Good afternoon, everyone. I'm Yariv Dafna, the CFO of the company. I've been with the business now two years. So Itai has just given you an overview of our position, our plan and the potential that we are building as a business. In my section today, I will expand on our financial framework and how our plan will deliver superior shareholder returns. Let's start with Slide 18. Our enterprise value today is about $2.2 billion, made up of approximately $1.7 billion of net debt and approximately $460 million of equity. This is a position where our net debt is high and above our midterm target of 3x net debt to EBITDA. We have a clear plan to grow the equity value of our company through focus on integration and building more profitable and efficient business. From a finance perspective, the top priority in our plan is deleveraging. In the near term, this will be driven by improved EBITDA. But in the next few years, our disciplined capital allocation model will also prioritize debt reduction over any other opportunities. The combination of this will provide strong value creation potential for our shareholders. Next slide, please. A quick update on our current trading. We have seen good growth over the last couple of years with our pro forma online revenue, growing from GBP 1.1 billion in 2019 to GBP 1.35 billion in the last 12 months. 2022 obviously has been a challenging year across all digital and e-commerce businesses, and we are no exception. On top of the macro challenges, we have also saw disruption from regulatory changes in some of our important markets. Despite this disruption, we are on track to deliver this year pro forma revenue, including retail of approximately $ GB 1.85 billion and adjusted EBITDA of GBP 305 million to GBP 315 million. Given the performance in the first nine months, this means that we are expecting to -- expecting adjusted EBITDA of GBP 88 million to GBP 98 million in Q4, reflecting an EBITDA margin of about 20%. Q4 is basically the first period to reflect our more disciplined and focused cost control and the early benefit of some of our synergies, and I will discuss more in details about the synergy in the next slide. While market conditions are challenging, I'm pleased with the progress we have made so far with the integration and with improving our EBITDA margin, and this puts us in a better position for 2023. Slide 20. One of our key elements of our plan to improve our profit margin is delivering synergies through the integration. As we have got stuck into the details of the integration, we have uncovered further opportunity for saving and have increased our cost synergy target from the original GBP 100 million to approximately GBP 150 million. The cash synergies of GBP 150 million includes approximately GBP 34 million of CapEx synergies resulting from our decision around the tech platform. And this means that the EBITDA benefit is approximately GBP 116 million. As well as increasing the target, we have also been able to bring forward our target, and we now expect to deliver approximately GBP 87 million for EBITDA synergies next year. The updated number give us confidence in our profitability and cash generation for 2023. As we have progressed with the synergy plan, we have been able to deliver more synergies and more quickly. On Slide 21, we provide details on where these are coming from. The first major area is cost of sale, which will present the direct costs that are linked to revenues. We have completed a deep analysis of our contract with supplier and have already signed deals realizing part of the synergies. The second major area is product and technology. Itai mentioned earlier, we have made a decision that the 888 proprietary platform will be the one to host all our brands globally moving forward. This will not only drive significant cost synergies, but even more important, will also give us a world-class product and technology base that will allow us to adapt quicker to customer preferences and drive future growth once we have the unified platform. The third major area is brand and marketing. Phil and Nir will talk later about these benefits, but we now have a suite of world-class brands, which enable us to be more selective when it comes to how and where we invest in various markets. We are also shifting our marketing spend to use brands within each market in the most effective way and building a single unified marketing service group. This will enable us to both enhance the ROI on each market and also deploy the marketing spend more efficiently. Finally, and this is also Itai was discussing about this, we are really focused on delivering our customer excellence plan. We can improve customer service and reduce costs at the same time as we realize the benefit of our new global shared services. Next slide to talk about our focus on profitability. Delivering our synergies is one of the key elements that underpins our plan to improve profit margin, but we are also focused on cost efficiency more in general. In this slide, I give you an idea of our current cost base and where we expect it to land in a few years once we deliver on our plans. We split our P&L, as you can see in the left-hand side, into three main cost lines, cost of sales, marketing and overhead or other operating costs. Within cost of sale, we plan to drive down costs by around 2 points as we execute our plan to streamline our supplier and optimize our operating structure. This will reflect future gross margin of 69% to 70%. Within marketing, we plan to reduce our marketing ratio by 3 to 4 points to 16% to 17% of revenue. We will benefit from removing inefficient marketing spend where our brands are currently competing against each other and will also enjoy the benefit of our centralized brand and marketing functions. Within other operating costs, we plan to reduce our cost by 2 to 3 points as we benefit from our unified tech stack and simplified operation. So overall, this plan, as you can see from the right-hand side, deliver adjusted EBITDA margin that are 7 to 9 points higher, and this can explain why we are targeting a group margin of more than 23% by 2025. Next slide, I will put more details about the retail. The retail segment generates strong cash flow. And as you can see on the left-hand side, it is performing well post-COVID and generating even more revenue per shop than it did in 2019. Retail is also a highly optimized state with quite flexible leases and an excellent property management team who are able to adapt to the changing real estate market conditions. We have seen a nice discount on leases that have been renegotiated this year that help us in the short term when we face external costs going up due to the inflation by more than GBP 15 million. So retail is a strong cash generator for us with a significant benefit to our U.K. operation, and Phil will expand further on that later today. Slide 24. My top priority as a CFO is deleveraging our balance sheet. Our position today is gross debt of GBP 1.8 billion with approximately 64% floating rate and 36% fixed. We have a hedging plan in place, and we will look for at least 50% of our debt to be at fixed rate and as soon as possible. Recent reduction reference rate and the forward curves have benefited our 2023 outlook, and we now expect the total cost of -- the total cost of interest to be approximately GBP 165 million, slightly down from the GBP 170 million that we indicated as part of our Q3 trading update. Our plans are built around strong equity growth framework. In this slide, we outline how our action will drive high shareholder return. Our evolved focus on key market opportunity where we have real advantages will unlock clear revenue growth potential beyond 2023. Every 1 point in revenue growth is worth approximately 1p to our adjusted EPS. Our simplified operating model and unified tech stack will support the EBITDA margin expansion. Every 1 point in EBITDA margin is worth approximately 3p to our adjusted EPS. Our cash flow management and prioritization of debt reduction will drive reduced debt from 2024 and on. Every GBP 100 million debt reduction is worth approximately 2p to our adjusted EPS. Our commitment towards deleveraging should also provide us with future opportunity to optimize the cost of the debt. Every 1 percentage point to our cost of debt is worth approximately 3p to our adjusted EPS. In this slide, you can see our clear plan for coming -- for the coming years that will unlock the potential of the business. This enable us to set today the following target for 2025. One, have revenue of over GBP 2 billion; two, have an adjusted EBITDA margin of over 23%; and three, reduce our leverage below 3.5x net debt to EBITDA; and four, deliver adjusted EPS of at least 35. Throughout the day, you will hear how we are going to achieve all these targets. For the analysts in the room, I would like to note a few items to help you with the model in 2023. I will not go through everything you have in the appendix in the presentation that provide all the details, but I will mention really the important stuff. We expect EBITDA margin of at least 20% in 2023. This is up from 15.8% in the last 12 months to June 2022. The action that we took to rationalize the cost also affect the CapEx, and we expect now GBP 90 million in 2023, down from approximately GBP 135 million in the last 12 months to June 2022. We are already running at an EBITDA margin of almost 20% in Q4 this year. So we have good visibility and confidence in achieving the at least 20% EBITDA in 2023 and moving up towards more than 23% in 2025. Next slide to summarize basically the finance section. Our current position is a newly combined business with high leverage. Our plan is to grow the value of our business, improve profitability and focus on market share gains in our key markets. I will ensure that we are really disciplined with our capital allocation, prioritizing debt reduction. Our plan will deliver superior shareholder returns and rapid EPS growth with a target of at least 35p of adjusted EPS by 2025. So as I have outlined, we have a clear plan in place that will drive profitability and deleveraging. I will now hand over to Vaughan, our CSO, who will take us through the strategy and how we focus our investment.

Great. Thanks, Yariv, and good afternoon, everyone. So I'm Vaughan, the Chief Strategy Officer, 888. Over the next 10 minutes or so, I'm going to be talking about our strategy, which is largely where we're growing and how we're going to deliver that growth. And I'm starting on Slide 29 with an overview of our strategic framework. I think Yariv, it couldn't have been any clearer about the goals and the priorities here. So we're going to grow EPS growth, and we're going to deleverage the business. Those are #1, #2 priorities. I'm often asked what is a Chief Strategy Officer and what do I do, so my teammates here. And in the context of our business, look, we have an amazing global platform and brands. We can operate almost anywhere, and we can operate our brands and products in almost any country. So when I think about strategy, it's about helping our business leaders here, really focus on where we can invest our money the most profitably where we can create the most value and how we can drive real prioritization. So this means that we're then spending our time, our team's time and our resources where we can generate the highest long-term returns. So that's what it's all about. Shortly, I'll run through our market priorities in these markets, we've got a really clear plan to grow market share. And the competitive advantages that we have to drive market share growth are these three key enablers here. So products and content leadership, world-class brands and customer excellence. We'll -- Phil and Nir will talk about how we're putting those into practice in both our U.K. segment and our international segment, and you'll hear a bit more about that after this. So the critical foundations that underpin that are also important. These are our people, and you saw from the video with Itai have engaged our teams are, and that's all about providing a diverse and inclusive workplace with growth potential, player safety and players and customer excellence is key to our plans. And after this, Harinder will explain more about our safer gambling plan. And then we're committed to doing our bit for the planet and combating climate change. So turning to the next slide. This is -- before I talk about where we're going to win. This is really an outline of the main strategic challenges that we face into as a business. So you can see on the screen here are four of the most important challenges that we face, I would say. So firstly, regulatory change. Everyone knows about how challenging regulations are in this industry, but they're not just a challenge for us. As standards rise, barriers to entries rise and those operators that have market-leading positions and capabilities are in a really strong position to succeed and benefit from that. M&A. We've seen a lot of benefits from M&A over recent years. Today is really all about how we're going to unlock the benefits from our combination. Channel shift and maturity. The U.K. is our biggest market. Around 60% of gambling is already online in the U.K. So we do expect growth to slow in the U.K., but there is huge growth potential in other markets. And today, and our strategy is really about how we position our business to benefit from both of those trends. And then finally, ESG. Customers, regulators, broader society are much more engaged in safer gambling now. Our people need really clear growth plans, need a diverse and inclusive workplace. And it's also important that we play our part in addressing the climate crisis. So today is really all about underpinning how our plans will ensure that our business is best placed to benefit from these trends and emerge as a real global leader. So turning to Slide 31. We and I'm going to talk about where we're focused on growing. So we have a really disciplined and data-led approach to ensure that we spend our time and our money or your money as shareholders on the right markets. We call it our market consideration framework. We use it to group all of our countries into these four archetypes. So firstly, our core markets, these make up around 70% of our online revenues. So the U.K., Italy, Spain. The addressable market here is around GBP 10 billion, and we've already got more than 10% market share in these markets. So a great position. We're focused on building our market share through delivering our competitive advantages. And these are all markets with tightening regulations and rising barriers to entry. So as we build on our market share, we build really attractive long-term sustainable profit centers. Second group is our growth markets. This is a small group of markets that make up around 10% of our online revenues. These are all regulated markets, but they're less mature than our core markets, and we have the opportunity to grow really rapidly here through disrupting these markets. We've got strong initial positions. And our focus here is on growth. So we will reinvest all of our underlying profitability to drive that growth and operate this group around breakeven. The third group we call our optimized markets. As we have a global and scalable platform, we can offer our products in a huge range of markets profitably in both regulated and offshore markets. These are markets where, right now, either the market opportunity doesn't excite us enough or we don't have the local knowledge, the brands, the capabilities to cut through and become a top three player. So our main focus in these markets is to drive profitability to offer our products and services in a really cost-efficient manner and get the benefits of our scalable business model. And then finally, on the far right, we have our pipeline markets. So these are markets or opportunities or regions where there's a really attractive growth opportunity, but we need a different model to unlock that opportunity. The best example of that is Africa, and I'm going to be talking about that on the next page. So all of our core growth and pipeline markets are locally regulated and this really drives our long-term sustainable growth plans. Our growth markets will become our core markets of the future with high and sustainable profits from market-leading positions. And we have a whole bunch of countries in our optimized group that are battling to become growth markets of the future and get the increased investment and focus required to do that. . Later today, Nir will talk a bit about Sweden and how that has the potential to become a growth market. We've got a market-leading brand already with Mr Green. And as we migrate over to the 888 platform, we will add the products and content leadership and have that combination of assets that could become a future growth market. So on the next page, as I mentioned, a few words on Africa. So Africa is a great example of our pipeline markets and how we're thinking about those. So it's a region with huge growth potential, but one where we need a different model to address this. It's a different type of product, and you need real local focus to access these markets. So to address this and make sure that we're taking advantage of that strong opportunity, we created a new entity called 888Africa, where we partnered with a highly experienced and entrepreneurial team, which is focused on driving growth just in this region. So having set up the business in March, we moved quickly to launch within four countries by September. And as you can see in the charts on the bottom left, we're seeing really strong growth in actives and stakes in just the first few weeks of operations. So the key to this is our focus on localization. So on the far right-hand side, you can see our promotion, Dabo Dabo, which is one of the headline promotions in Tanzania. This really resonates with local audiences in an authentic way and is done on the ground with really low cost with influencers. This is a promotion where for every bet you make, you get opted into a draw and then there are live draws on TV, you can win money, you can win motor bikes, you can win fridge, freezers, you can win TVs. And this is a really popular local promotion that really resonates with that audience. . And in the middle is one of our World Cup promotions. So the campaigns here have used our insight, our competitive knowledge of our markets to really build brand awareness and do that through low-cost and high-reach local channels. It is still early days in here, as you can see. We launched in September, we're two months in, but we've been really pleased with the progress we've seen here. We've entertained over 50,000 customers already in Africa, and we're really confident that we'll build leading positions in our chosen markets, and this will deliver really strong shareholder value. So turning to Slide 33 and a few words about our evolved plan for the U.S.A. So it's no surprise that the U.S.A. is one of the most attractive growth opportunities out there, but as everyone knows, is also intensely competitive. So our original plan here was to build a nationwide sports-led operation in 12 to 15 states. It's become clear to us that the intense competition in sports betting and the dominance of the top four brands means that it will be very difficult to deliver positive returns without evolving our plan. So with just over a year of operations under our belt with the Sports Illustrated Sportsbook brand, we now have really clear data about how we can convert players, what they play, what makes them stay, what are the different values between the different cohorts. And that data gives us real confidence in our Evolve plan. So our Evolve plan is called Betting 2.0, going deeper and leverage key assets. So this is all about bringing Sports Illustrated to our players, news and content and then really focusing on being laser-focused on a key cohort of the older male demographic. And as you can see on the bottom right, older male demographic are worth more. They spend 4 to 6x more than the ultra-competitive younger demographics, and they also love casino. So these are players they are older, they're male. They love betting. They love casino, and I feel like I know quite a lot about this, and we call it the unsexy sweet spot. So our plan also focuses much more on casino and iGaming. The iGaming market is almost as big as the sports market in the U.S. even though gaming is only in six states and sports is live in 22 states. 888Casino is also probably the best online casino in the world. So we have huge competitive advantages to disrupt these states. So the U.S.A. is an important market for us. It's certainly one of our growth markets. But importantly, it's part of a portfolio of growth markets that are competing for investment with each other. So across that portfolio of growth markets, we will operate at around breakeven. So while we continue to invest with confidence in the U.S., we are going to deliver positive returns by really focusing on what we are good at and where our brand cuts through. So turning to Slide 34 and to wrap up this section. There's often a lot of negativity around the gambling industry. People focus on regulatory changes, recession, whatever it might be. Look, this is an industry I've been in and around on the finance side and on operating side for 20 years. It's a fantastic industry. And we've built a business with leading positions across some of the most attractive countries in the world with amazing brands and great technology. So great industry. I love it. I'm a massive betting and gaming fan. I use all of the competing brands. And I can tell you from experience that 888 and William Hill are amongst the best products out. So we've got great brands, great products, and it is still a really attractive industry with huge growth potential. There's still loads of consolidation to come, and that will create value for the leading operators and the leading businesses in this industry. What you've heard today from Itai and Yariv and what we'll outline for the rest of the day, is a really clear plan that puts us in a position to ensure that we're one of the long-term winners in this industry. And while we're executing that plan, and I think the priority on deleverage couldn't have been clearer. We will still be topping up our future potential pipeline so that we've got a strong runway of future growth opportunities once we've reached our deleverage targets. I'm now pleased to hand over to Harinder, who's going to talk through our plans -- safety plans and how important that is in terms of our long-term sustainable growth plans.

Thank you, Vaughan, and good afternoon, everyone. I'm Harinder Gill, and I recently joined the company in a new role as the Chief Risk Officer. You heard Itai speak earlier about how critical safer gambling is, and this is exactly why my role was created. I oversee all areas of risk with a strong focus on safer gambling. I'm new to the industry, but I'm not new to overseeing risk in a highly regulated industry. For the past 20 years, I've been operating in risk management roles in top-tier international institutions including 13 years at Barclay's Bank, had various roles and positions, including have the opportunity to work in London, New York, and Singapore. And most recently, I was the Global Chief Compliance Officer at Revolut. This has given me great experience of what it takes to build a best-in-class risk and compliance function and succeeding in challenging regulatory environments in the U.K. and overseas. Turning to Slide 36. This is our overall strategy framework that Vaughan just talked us through. One of the critical foundations of our plan is players and, in particular, player safety. Since joining, I've been impressed with the progress that the team have made in recent years. We have a great team and we've got great top quality technology capabilities. These are central to our plans to continue to reduce the risks related to player safety. However, we know that there is more to do. We are on a journey of continual improvements, enhancing our approach to risk management, improving core processes, integrating teams and managing a bigger and more complex organization. So turning to Slide 37. This is a snapshot of our business and where we operate -- where we operate in regulated markets. Our focus as a business is to build leading position in some of the most attractive regulated betting and gaming markets in the world. As Vaughan just outlined, our core markets and growth markets are all locally regulated. As you can see on the right-hand side, this focus as demonstrated with the mix of our revenues from locally regulated markets consistently increasing over recent years. This reflects two key points. Firstly, more of the markets in which we service players have regulated. And secondly, we've been able to grow significantly within those markets that are already regulated. Providing high safer gambling standards is one of our key principles and underpins our growth ambitions. We know that both William Hill and 888 have not always been good enough in two important areas in the past. Firstly, the policies that underpin gambling have historically at times been too lenient. Secondly, the processes to implement these policies have not always been sufficiently robust. A lot of progress has been made in the last few years. And since starting my focus has been to understand both our policies and processes and continue improving these. I believe we are making good progress. And it's clear that across the business, there is an incredible drive to build strong player controls to significantly reduce the risk of players encountering harm from gambling. Turning to Slide 38. We are building a company culture and working practices where safer gambling is central to the customer experience and at the heart of everything we do. The risk and compliance team has more than doubled in size across the group in the last three years, which includes the U.K. and international market, for which we have almost 400 employees. It is one of the largest teams to business, reflecting just how important it is. The team is well positioned to meet changing requirements and expectations and we are well positioned to scale the existing team and their experience to support the business in achieving its future ambitions. If you look at the group today, our position is that we have three separate platforms each with slightly different approaches to safer gambling. Our plan is to drive a consistent journey of continuous improvement. We will unify our policies and processes to drive higher standards across the business. We are collaborating across the industry and with external stakeholders to build a deeper understanding about the root causes of harm and how we can use our technology to intervene at the right time to reduce risks. We have already made significant investments in safer gambling technology across the group, both in customer-facing tools and background monitoring systems. The technology used in the background is key to keeping players safe. It is processing all transactions in real time to understand player behaviors and triggering alerts and warnings where appropriate. On the customer-facing front, we have 888's control center product, which gives players transparent insight into their play through intuitively presented real-time data. It also provides easy access to a range of safer gambling tools. Furthermore, we have a clear and easy to use profit and loss tool that has been developed by William Hill. All of this gives us great data and insight into what customers interact with, what works and what doesn't. We will continue to innovate. We will continue to learn and we will continue to improve. Right now, we're working through all of these tools and customer insights to understand how we can best utilize and improve our existing tools as well as how we can better develop our new technology. We continue to strive to use technology as a force for good, leveraging our data and AI capabilities to personalize player safety. Turning to Slide 39, and to wrap up this section. We are in a position today where we have dramatically improved our safer gambling policies and processes in recent years. Safer gambling is now truly at the heart of what we do. However, we do have some alignment work to do between brands to ensure we're operating optimally and with the most robust policies and processes across the business. Our plan is to make safer gambling a normal part of the customer experience. We strive to build seamless and frictionless customer journeys that enable players to easily track their spend and where necessary stop spending while also enabling us as the operator to step in when there is a risk of harm. Our potential is an even more trusted relationship with our players, who know that they can enjoy their betting and gaming with us in a safe and sustainable manner. I look forward to telling you a lot more about this critical area and our progress in the future. And now I'm going to hand over to Phil to tell you more about how we're set up for success in our most important market, the U.K.

Thanks, Harinder Gill, and good afternoon, everyone. My name is Phil Walker, and I'm the Managing Director of the U.K. and Ireland division. I've been in the industry for about 13 years after holding similar positions for Ladbrokes Coral. Here at 888, I'm responsible for the P&L of our U.K. business, and I run all of the group brands in the U.K. and Ireland and I leverage range of group services that Itai mentioned earlier, around product and content, payments, customer services and digital marketing. So starting on Slide 41. We show what a strong position we have in the U.K. today. In retail, William Hill is the #2 operator with about 23% share of the market. Having over 1,350 shops gives us a huge competitive advantage, building brand presence, maintaining trust and giving us tangible points to interact with our customers. They are also great cash generators. Our market share of revenue is slightly higher than our share of shops as we have a higher revenue per shop than most other major operators. In online, we have one of the leading sports book brands and two of the leading gaming brands with a 13% market share of the total online betting and gaming market. One of the real benefits of the combination, though, is going to be our ability to market share gains through increased share of wallet. Both William Hill and 888 have very high brand awareness and already have a relationship with a large number of U.K. customers. Our goal here is to continuously improve our product and customer experience so that we become the #1 choice for our customers, and they choose to spend more of their money with us. This also supports sustained growth as customers aren't spending any more on gambling overall, just more of it with us. With the unique brand assets we have, we will also be able to tailor our brands to different segments than the go-to choice for a wide range of audiences. And over the next few slides, I'll expand a little more on how we plan to leverage our competitive advantages to do this. But first, if we turn to Slide 42, I want to address upfront some clear challenges we are facing in the U.K. in the short term. The first is the macroeconomic environment. There's no that we are likely to be in recession across the near term. Our customers are facing high inflation and a squeeze on the cost of living. However, you can see from the chart on the left, that overall U.K. gambling spend was fairly resilient versus the decline in discretionary income in the last major recession. Given that we have a more recreational customer base now and our products are low-cost entertainment, with the average bet size online at GBP 16 and just GBP 12 in retail and an average stake per spin on slots of just 62p online and 91p in retail, we feel that we are well positioned to face into the challenge across the U.K. business. We are, of course, also facing potential changes in regulation with the government planning to introduce a white paper to set the framework for future regulation in our industry. Our business and the leading operators across the market have made huge progress in addressing the concerns of society and the regulator putting in recent years. We are using our technology to detect signs of gambling harm and intervene increasingly early, as Harinder explained earlier. As well as using our technology, we have set much stricter limits across different customer groups. Now while we believe that a personalized approach through technology is ultimately the ideal scenario of protection without penalizing those who are simply enjoying a bet. We do recognize that for some customers, these limits can and do prevent problems for escalating. As an example, we have introduced background financial vulnerability checks from GBP 500 of net loss, additional affordability thresholds and reduced the maximum stakes on all of our online slots to just GBP 10 across all of our brands in the U.K. market. These types of interventions and limits have impacted our combined U.K. revenue substantially and will continue to impact into 2023 as the full year annualization of all the measures takes effect and further measures are introduced. But we know that this is the right thing to do and is helping to build a more powerful, sustainable business and is improving customer trust. We are confident this will help us in the long term to become the brand of choice for even more online customers in the U.K. Now as you heard from Vaughan, our plan is to grow market share in the U.K. by leveraging our three competitive advantages: products and content leadership, world-class brands and customer excellence. Now I'm sure you've all downloaded the William Hill app, after which I told you about tonight's football offer. But in case you haven't, I'll give you a flavor of some of the exciting developments that we've made so far this year and some of the potential we will see from combining our platforms. Perhaps the best example of our really strong innovation is our William Hill Bet Builder product, Build Your Odds, enabling customers to track their bets is a really important part of the customer experience. And, our players can now see the status of each individual leg in real time and whether it is winning or losing. As well as being a great way to follow the action, it also allows our customers to take informed actions such as cashing out. We also allow customers to boost or ensure their odds pre-match, which increases value perception and improves customer engagement. And all of this is right inside the bet slip in your William Hill app. On the William Hill gaming side, we developed a proprietary real-time promotions framework, which enables interactions with our gaming players across all game providers. This drives engagement for customers and enhances their entertainment experience. We've also made the whole gaming experience more personal and relevant for our customers with targeted games content in the lobby, which is improved customer experience, value perception and player retention. As Itai mentioned earlier, within the 888 gaming space, we have upgraded our core platform and significantly increased speed, introduced our in-house AI recommendation engine and enabled higher levels of customization to further improve the customer experience. We have also heavily invested in ensuring we have the best content available on the platform, and we'll have 2,800 games available by the end of this year. I'm particularly proud that nearly 40% of our top 20 slots our in-house games developed by our Section8 studio, and I look forward to introducing that top class content on to the William Hill platform very soon. And that really is one of the major benefits of the combination and moving to a unified platform that I'm most excited about, the ability to share the best of both across sports and gaming with customer experience across all our brands being improved as a result. And last, but by no means least, we have invested heavily in tools and features to improve player safety. As Itai and Harinder both mentioned, these improvements include a smart profit and loss tool, improved player risk algorithms, our unique control center product and a best-in-class player help center. Turning to Slide 4. Our second sustainable competitive advantage is our world-class brands and marketing capabilities. As you've heard earlier, we have a range of powerful brands in the U.K. market, and that enables us to maximize the ROI on our marketing spend. You heard Yariv talk earlier about synergies and optimizing marketing spend is one of the areas where we can deliver meaningful results quickly by investing in the brands with the highest returns and targeting our marketing activity to the customers who will find us most attractive. We can also offer tailored and personalized products and promotions to different groups of players. So for example, with our William Hill Epic odds offer, we applied in great value boosts in football, which is the fastest-growing part of the U.K. market. Combined with our leading Build Your Odds product and leveraging the fantastic heritage that William Hill has built up in football and racing over the last 80 years, we can continue to be the home of football betting for U.K. customers. For gaming players, we have the higher-end casino-led 888Casino with its market-leading live casino offering, which we can promote to a different audience than William Hill Vegas, which is a compelling all-round proposition available online and in shops that focuses on mass market recreational entertainment. So we really do have something for everyone in U.K. gaming. And turning to Slide 45. Customer excellence underpins our whole philosophy. Understanding our customers, understanding what they want, what they don't like and how we can engage them and create great experiences for everyone. One of the real focus areas in William Hill over the last 18 months has been user journeys, looking at the basic things that players do the most and making sure that they have top quality experience from start to finish. This could be resetting your password, depositing and betting, tracking your bets or changing player safety limits. Understanding the flow of all these journeys, testing different options with our customers through deep insight and [indiscernible] testing and making them as seamless as possible. We call this concept William Basics, and we've made huge improvements across both William Hill and 888 brands over the last 12 months. And you can see from the chart, on bottom left that this has led to a significant increase in the amount of days that players spend with us as we become the preferred brand for more of our players. Now as you heard the headline numbers that Yariv shared earlier, people are spending less overall, but we're encouraged that they're choosing to do more of their betting and gaming with us. Itai talked about the improvement in customer service we've seen that has delivered a strong improvement in NPS since the start of 2020. And again, there is more that we can do here as a combined business. With a focus on quicker contact resolution, deep insight, market-leading chatbots and continually improving the customer journeys. So getting the basics right and improving our customer service drives higher retention and player value and makes our marketing more efficient as our brand strength improves. In other words, we retain more customers that are worth more and can acquire more valuable customers more cheaply. So turning to Slide 46 and on to our retail business, where the William Hill brand has been leading the sports betting industry for over 80 years. In retail, we have a similar philosophy to beat the competition through product and content, colleague excellence and a clear focus on customer experience. launch new industry-leading gaming platform from December this year. And you can see an example of our new machines on the left. With unique content, software, features and cabinets, we will have the strongest offer on the high street. As I mentioned before, our market share of revenue is higher than our share of shops, but we have been stronger in sports than gaming. So investing in this best-in-class gaming offering will help us deliver growth in retail gaming as we roll out those new machines over the whole estate in the next 18 months. On the betting side, we have further developed our own proprietary self-service better terminals with new features completed ahead of the World Cup. And you can see this terminal, second on the left. For those who haven't been into a shop recently, these are really intuitive touchscreen systems that allow customers to find and place bets really simply a bit like the ordering system in McDonald's. Another important investment this year has been the completion of our new system, which is EPOS smart hubs [indiscernible] The third picture here. For the first time, this allows customers to enjoy the full range of betting markets when placing a bet with one of our colleagues over the counter. And finally, on the right is a picture of one of our new Shop of the Future shops in Leeds. I'm very proud of what we've been able to create. And if you get a chance to take a look at the video of our new shops over drinks later, I'm sure you'll agree, they are a major step forward in U.K. retail. Looking into 2023, we will continue to innovate even further with a range of technology and customer experience trials taking place. These trials include footfall trackers, gantry cameras to inform us about how our customers enjoy our market-leading broadcast content and racing form and statistics embedded into small form factor research units for the first time. As Yariv slides showed, we've invested over GBP 20 million in CapEx in retail over the last 12 months, which will deliver strong returns in 2023 and beyond. Turning to Slide 47. One of the greatest assets is the brand power that our U.K. retail estate provides. The William Hill brand is a huge asset and instantly recognizable up and down high streets across the country. With our nationwide coverage, we have the ability to interact with millions of customers every day. We have installed digital display screens across about 1 in 5 of our shops, where we can deliver dynamic and localized content for the first time. That content includes not only retail promotions and information, but can be used to support acquisition for our online businesses, too. We have also extended our reach during 2022, bringing our retail betting experience to 36 race courses in the U.K. The benefit this brings was best illustrated during the festivals this year, where we attracted over 1 million searches for williamhill.com, as well as taking some really good business on the tracks. And turning to Slide 48. Customer excellence is our third sustainable competitive advantage. When we look at the retail customer base, there are really two main factors that drive business. Firstly, location; and secondly, the quality of our colleagues in shop. We did a huge amount of work over the last three years to ensure that our estate is in the best possible locations. While we have significantly reduced our shop numbers, we now have a really optimized estate that is highly profitable with excellent geographic coverage. But really, it's our shop teams that make the difference. Our colleagues are amazing at promoting our brand values and ensuring that customers have a great experience with us. And we know that leading the market when it comes to speed of service, and having friendly and knowledgeable colleagues continues to be the most important reason customers choose with William Hill. Now while many of those customers are retail loyalists and only bet in retail, we have an increasing number of omnichannel customers, who bet both online and in shop. The experience for these omnichannel customers has been constantly improving since we created the U.K. team in September 2020. With the combination of our new smart hub EPOS system and rolling out Epic Odds from online into retail, we have seen a strong improvement in online account registrations in shop. And we're also going to enhance the omnichannel experience further, through things like being able to verify your documents in your local shop for online accounts or using our shop colleagues to help answer queries. And these are just some of the ways that we're using our shops and online together to enhance the overall customer experience. So turning to Slide 49 and to sum up my section. The U.K. market is incredibly important to the group. And while there are short-term challenges, it remains one of the world's biggest and most attractive markets. We have a leading position in this market. And now with the combination of William Hill and 888 brands, we have a huge potential to grow share with a clear focus on product and customer excellence, leveraging the enhanced capabilities from the rest of the business. Our retail estate is a really attractive asset that not only delivers strong cash flow and ROI, but also supports market share gains in the online market. I'm really excited about the potential in the U.K., and I'm really confident about our plans to grow share in one of the largest betting and gaming markets in the world. I'm now going to hand over to Nir, who's going to run through the plans for our

Good afternoon, everybody. Very glad to be here today. My name is Nir Hakarmeli, I'm the Managing Director for the International business for the group. Again, very excited to be here today with you. In the next 10 minutes or so, I'm going to share with you what are my plans for the international team. And we'll give you a couple of examples of how the strategy -- the market focus strategy that Vaughan and Itai mentioned are going to be brought into life in the International business. So turning into Slide 51, and we'll start with an overview of the international business as it is today. As you can see on the left side, we have a very strong market in many of the most attractive markets that we currently have, the regulated markets, with Italy. In Italy, we have 6% market share; in Spain and Denmark, a double-digit market share; as well as a strong presence in markets like Canada, Sweden, Germany and Romania. . As you can see on the bottom left, we also have strong brand awareness in many markets by more than one brand. And in other markets, for example, if you look at Canada or Romania, we have one single brand that is dominating, is going to take the lead, and this is going to be reflected in our strategy. Moving to the left -- to the right side, sorry. This is a snapshot of what are the two main pillars of our strategy for the international business. So you can see that the strategy is built on two main pillars. The first one is relentless focus on the markets that we believe are with the highest potential to grow. As Vaughan talked it previously, we came up with -- we've conducted a very thorough analysis when we came together, looking at all our brands in all our markets and identified through a large set of metrics from financial, operational, customer and brand metrics. We identified three sets of markets, the core, growth and optimize. Under the core, for international obviously in addition to the U.K., under the core, we have two main markets, which are Italy and Spain, where we see both William Hill and 888 work together in a very complementary manner to target both sports and gaming segments. In those markets, we will continue to invest in product and marketing to drive growth and to drive sustainable growth in market share and profitability. The second category of the growth markets, where we see a couple of markets under this category in international is essentially where we see an opportunity to grow through a single brand, although in some of those markets, we have more than one dominant brand, we will streamline our focus and our investment behind -- primarily behind single brand in order to drive rapid growth. Two examples of those ones are 888 in Ontario that launched in the regulated market earlier in the year and gained good traction and Mr Green in Denmark that I will touch on later on. And the last category is the optimized market where we are looking to drive high return on investment and high margin. I think Vaughan touched on Sweden, maybe a word on that one. Obviously, Mr Green was born and raised in Sweden. This is currently not a growth market for us, simply because despite the very high brand awareness and very high score, we do recognize that we need to put the right product behind it. Therefore, we are prioritizing the integration of Mr Green brands into the 888 platform is the first priority. And we will be looking on the back of the enablers that the platform will give us to add Sweden back to the growth category. So clear focus on strategy, for each of those markets, this is the first pillar. Now the second pillar in the strategy is how we're going to win and how we're going to leverage our competitive advantage in three main areas. One is the world-class brands that are going to differentiate ourselves and differentiate the experience that we are giving to our customers in each of our markets. The second one is product and content leadership. When I personally see as the biggest opportunity that we have, looking at the best-in-class platform that we've built in 888 with great, not only casino capabilities, but also very advanced marketing and ad tech capabilities. And this is one of the opportunities that I will touch on in the next slide. And the last one is customer excellence, where we are looking to optimize the customer journeys and with clear emphasis on localization and understanding of the customer needs and to tailor our different player journeys into what the market and the customer needs. We already implemented quite successfully a similar process that we call customer experience squads, small tactical teams that are working in our key markets to really deliver improvements in fast-paced short cycle, and we see almost instantly the impact on customer retention and satisfaction. So all of those three elements, empowered by localized operating model, and enhanced by the integration are going to allow us to win in the focus markets in the core and growth markets for us. Moving on to the next slide, and I'm on slide 52. I would like to give you two examples of how we're going to implement the strategy in our core and growth markets. We will start with Denmark as one of our key growth markets and how we are going to elevate the market-leading brand with enhanced products. So Mr Green is already a well-established brand in the market, over 10% market share, top three in terms of the market position and great brand awareness. And this is a brand that we've built over the past few years by a very, very strong leadership team with a vast localized knowledge and great access to both offline and online and digital marketing channels. We're seeing significant growth in this market, and again, great retention and customer satisfaction. By integrating Mr Green into the 888 platform, we're going to almost immediately unlock great product enablers, that will give us access to superior app, promotional engagement tools and a lot of other marketing tools that are going to elevate our proposition and improve the return on investment. We're going to get access to over 10 -- sorry, to over 1,000 games available in the market, in the region in general, and access to over 150 in-house exclusive games developed by Section8 whether it's lots exclusive jackpots, table and card games, all are going to enrich our portfolio in the market. And all of this is going to be also enhanced by fully automated AI-driven recommendation. AI is a buzz more than. But what I've seen in the past few months that was built and already fully optimized and operated on the 888 platform is a real, I would say, market leader tool. And you can see in the bottom chart, some of the results that we are seeing since this tool was implemented at optimized with 10% increase in better players, almost 10% increase in revenue per player. And this is something, again, that is going to give us a lot of leverage to enhance our proposition in the market. So this is one example of how to elevate already market-leading brand by product enhancement. And I'm confident that this plan is going to really deliver the continuous growth in the market. Moving on to the next slide is going to be my second example, which is how we're going to approach a core market like Italy, where we have two primary brands: William Hill targeting sports customers, primarily and 888 targeting casino customers or gaming customers, both are leading in their category, and how we're going to grow share through enhanced sports betting and gaming experience across the brands. Here, I would like to put a focus on what are we doing with the teams. We are structuring the teams around those core and growth markets. And by doing it, we already see great value in sharing best practices and looking at a lot of data and to identify the opportunities and to act on those opportunities in those markets. So I've mentioned here three elements: One is the brand and marketing, where local expertise in marketing are sitting and going to set together under one organic team and driving the growth of both brands and obviously share best practices as well as I wanted to mention here some of the digital asset opportunities that we have. For example, when it comes to SEO ranking, I think a huge amount of work has been implemented both on the product and the knowledge and the know-how. And you can see here the very high ranking of 888 on casino keywords, and those are the things that we already started to implement across the different teams. So again, a lot of opportunity by just bringing the teams together and start to action on the knowledge sharing. The second one is product and content leadership, where, again, looking at the data, we have seen some interesting opportunities. For example, if you look at the ARPU of sports customers, we are seeing that the ARPU on William Hill is 86% higher than 888. However, if you look at the ARPU of the cumulative ARPU across the two products, gaming and sports, we see that the ARPU on the 888 brand is delivering 60% higher, meaning indicating a lot of opportunities to either target different audience or improve cross-sell capabilities. We've invested a lot -- in William Hill, for example, we've revamped our [indiscernible] boost, one of the most popular propositions targeting football markets and customers in Italy, where we really thought about how to put the customer experience in front of mind, how to enhance the customers' experience. We have implemented, again, revamp of this product in the last couple of months. and we're seeing very, very good traction, again, looking to implement as part of the integration, those product capabilities into the central platform. Lastly, on the customer excellence, I wanted to give you 1 example of many of -- and Itai touched it on his part on the free-to-play wheel and all of the suite of games. So one of the games went live in Italy in 888 daily free-to-play offer, again, fully optimized, fully localized to the market needs. And we have seen almost instantly an increase in player engagement and player retention. As you can see on the graph, since around May this year, we're seeing a very sustainable level of actives indicating a very high engagement. Obviously, we're seeing the opt-in rate and the engagement we're constantly increasing, which gives us the confidence that this is definitely the right proposition. And obviously, we're going to implement throughout in the next few months, we're going to implement those tools across all the markets and with the platform integration across other brands as well. . So this is another example. And I would like to move to the last slide, where I would like to summarize with my key messages and maybe zooming out a little bit from the two very specific examples that I gave you, to summarize that we are coming from already a strong position with a very strong portfolio of brands in all of our core markets in both markets. We do see the opportunity by migrating into the new platform and enhancing our product capabilities by structuring our very, very strong talent pool. And I think we're all seeing while we are progressing with the operating model we are seeing such an amazing talent pool that we have in the business, bringing this talent pool together with a very clear focus on high return from our brands using localization capabilities and brand selection. Those three elements of our plan are going to really unlock the potential that we see in the business and leveraging the scalability that we have to grow both our existing markets and our new markets in the future. So with that, I would like to hand over to Itai to summarize.

So thank you, Nir, and I'd like to thank all of the executive team members that took part in the presentation today. really great and informative presentation. And today essentially has been all about explaining our plan to deliver a streamlined higher-margin business with rapid deleveraging and to grow our shareholder returns. Executing this plan is our top priority, and this will be -- and this will build a business with huge potential for the next decade and more than that. Cementing our position as one of the global leaders in the exciting and growing industry. We are excited about this opportunity and about the future of the company, and we are very confident that we can deliver our plans. So with that, it's now time to take your questions. So I'm going to ask the rest of the team that presented to join me on the stage. And just if you would like to raise your hand for questions and the microphones will come over to you. And for the people who are online, you can put your questions in the system, and James will read out the questions that we haven't covered here physically. And I'll hand over. I'll take some of the questions and hand over to the team members, the relevant ones. Who's? Yes, James where is James? Ivor, please?

Ivor Jones from Peel Hunt, best boy band ever. And more than once you said deleveraging was a top priority obviously at the [ CY ], but is there something else you would like to be doing with cash that you cannot because of the requirement to pay down debt? Or are you just indicating the importance of the debt?

So obviously, there's always a balance between growth and deleveraging. We set a clear focus that now our focus on deleveraging, and let's say, optimizing our balance sheet better. This does come on some growth expansion plans, which we will defer to earlier date.

You talked about keeping new product development going but you're migrating the bigger business off the William Hill platforms. So are you going to launch new product development on a platform that's about to be shut down. Or is NPD only on the target platform 888, so we have to wait for that benefit till the migration that's come through.

Yes. So it's a very good question, Ivor. So first of all, we are continuously developing innovation and features on the 888 platform. I gave you one example, which is the spin the wheel. There are several others that just came out recently. We had a really interesting feature in poker. And in sports betting, we had the innovation features that we recently launched. And these will continue to drive engagement with players, increase activity and increase the value that we're getting. . Indeed, in terms of where we're prioritizing the investment in product is in the target platform and not the platform that will be migrating off. Mr. Green is migrating in a few months. So obviously, not investing there and William Hill until we get to migration, while still supporting all the needs that we need to keep our market share in the U.K. The customers have a great experience now on William Hill in the U.K., and we need to make sure that until we migrate them, they continue to have a great experience, but we are not going to invest heavily there new features. That will not be relevant for the future.

Okay. And last one, if I may. On retail, the Shop of the Future, do I need to know how much it's going to cost? Are there going to be 1,350 of them?

That's a very good question that I will refer to, Phil.

So they're not going to be 1,350 of them. We're using the two Shop of the Future concepts to trial a number of features and technology trials and experiences that we will be able to roll out relatively cheaply. And we continue to invest in all of our shops, proportion of them each year. And what we'll do is roll in the best features of Shop of the Future into those, what you call business as usual refurbishment plan. So you shouldn't expect a huge CapEx bill for thousands of Shop of the Future. But I think we can learn a lot and take the best bets and roll those out as many shops as possible.

I'll just add a word on the product question, if I can. So having full control of the product rate map is really critical here. So I'll give you an example today, Phil and Itai talked about the [ 7 to 2 ] top price on to score first about that doesn't score being well anyway. But the 888's sports promotion is bet 5 pre-match, GBP 5 bet in play. Now because of the technical constraints on the William Hill platform, that's a promotion that can't be used. So in the future, product innovation like that, that enables us to really control the product, get closer to the customers, what works, engage them in multiple products, have that real cross-selling in play into our really quality exclusive games. Those are the sort of opportunities that drive a much more engaged audience and make us the brand of choice for our players. So it's not about getting people to spend more overall. It's about us capturing more of their share of wallet and becoming the default home for in-play, for casino for prematch for everything.

David Brohan in Goodbody. Just three questions. So firstly, in terms of the SI Sportsbook, you mentioned that kind of growth region would be run to breakeven. Can you disclose what the quantum of U.S. losses will be suppose next year or the following year? Then in terms of Spain, could you touch on just -- there's been some regulatory changes there and imaging, the ability to restrict winning customers. You just touch on the effect that's hitting your margin and maybe kind of investment decisions in Spain and in the [ Bucharest ]. And then just in light of the reduction in industry GGR in the U.K. Has there been any reduction in the cost of marketing assets on the Bucharest?

Okay. I hope I'll remember all three questions.

I would take in the U.S. So in terms of losses in the U.S., so we were indicating in the past about GBP 20 million this year, this will be lower than this GBP 20 million. And next year, you could expect a lower level of losses, I would say, a high single-digit number that's the right.

I can take...

Yes, the spend margins and restrictions. So there are indeed restrictions in the market. And I think the margin in Spanish is one of the lowest currently in Europe. However, we are -- our margin is higher than the market. And we continue to see this gap of William Hill trading a higher margin in the market, continuing the last couple of months as well. So we continue to invest. Obviously, a lot has changed in the regulation. But so far, we see a good return on investment.

And on the U.K. question, yes, we have seen some declines in gross win and net revenue, and we've reduced our marketing spend proportionally. So we've maintained our marketing ratios for the U.K. business and obviously, which is going to be more agile as to where we spend that to get the best returns, but we have reduced total absolute spend capital ratios in line.

Richard Stuber from Numis. The first question, actually, can I ask about your guidance for this year, talking about single-digit revenue decline. Is that entirely the U.K.? Or is that also a function of maybe refocusing some of your optimized countries of i.e., sort of pulling out.

This is substantially the U.K.

Okay. And the second question, just on the retail estate, Phil, that's right. Obviously, you've optimized it in the last couple of years, but obviously, the last few months, you've seen some increasing energy costs, wage bills, et cetera. Do you still think that 1850 shops is optimum and what would be optimal state size.

Yes. So 1,350 -- I wish we had 1,850. So I do think the 1,350 is still the optimal number. I mean, clearly, the energy price change has been a substantial cost change and as has the national living wage. But we've been able to mitigate a large part of the national living wage increase by restructuring the business, which we're just in the process of completing. So we're confident we can take most of the pain from the national living wage change out. So that GBP 15 million of cost pressure doesn't change our target number of shops. So 1,350 is about the optimal number. There's very few loss-making shops in the estate now because we took decisive action back in 2019, perhaps more decisive than some other operators. So now we can get the benefit of that with a highly efficient state that we're very confident in.

And 1 final question on the background checks online. I think you said it did more than GBP 500 plus is background checks are carried out. How does that work? And how much of -- is there any friction at all from a customer's point of view? And any color around that, please?

Yes. So first of all, those background, those checks happen in the background. So it is frictionless, but I'll let Harinder expand on that a bit.

Yes. So we do focus on frictionless checks if possible. So as a -- maybe to a question, a specific example, when we need to verify the identity of a customer we would go through a kind of electronic verification process beyond the scenes and that will be effective for the vast majority of our customers. If for some reason that behind the scenes process, which looks at things like [indiscernible] the U.K. for some reason, was inconclusive or couldn't get an outcome, only that point would we ask the customer for some form of identity documentation. So again, the focus is very much on the discrete behind the scenes, checks that can be done at scale at pace and without -- with minimal friction. But of course, if we need to engage the customer than we would.

So it's more about verification of the person as opposed to the affordability of that person with background checks.

So with the back with the background checks, it is very much on [indiscernible]. However, there are things that we do from an affordability perspective as well. So there are cases where there is public information available. And so we use third party providers in which to kind of source that publicly available information. So again, where we can avoid asking the customer information because we've got other data points we can utilize even for affordability, we will do that.

Ed Young from Morgan Stanley. I've got one question on the market consideration framework. So Slide 31 -- and comparing, I guess, to Slide 51, where you go through your international markets. I guess I'm curious, if I look at 51, Romania was your highest brand awareness out of all those markets. I don't see Romania, a flag on there. So I'm just wondering, in terms of the growth markets, up sort of Eastern Europe doesn't appear to be LatAm. Can you just talk broadly about the considerations, obviously, there has to be a level of focus. I understand that -- but how have you made those judgments in terms of where is attractive and where you're going to sort of choose to have in store to optimize as you've done?

Yes. So that's a good question. So first of all, Romania is indeed a high market share country but has changed the tax framework change in Romania, which means it's -- it has become a less profitable market. And therefore, we're moving resources for higher growth, but also higher profitable markets. So that specifically on Romania, but on the rest of the considerations of how do we decide to invest in one market versus the other. I'll let Vaughan expand on that.

Yes. I lost my bet on the first question. So in Romania, like Itai said, look, we've got high single-digit market share. It's a really good market for us, reaping on that rather than competing with some really strong local sports-led brands is the right strategy for us to maximize returns. In terms of the broader framework, yes, we essentially use a huge data set to rank each market that we operate in, in terms of its attraction. So how big is the market, how stable are the regulations and taxes, what's the growth opportunity? What's the shape of that market in terms of competition? And then we layer over that, what's our competitive position, what assets do we bring into that market, how strong is our chance of success in terms of investing and competing hard. So what's our brand awareness, how many differentiated channels do we have in terms of access to marketing or payments or different customer rates. And then we layer all of those across each other and essentially look at how do we allocate our time and resources to the opportunities where we maximize our chance of success and returns. So it's very, very detailed. I'd love to run through it with you, but it's got a huge amount of sensitive information, so I can't.

More questions?

I was just wondering if you could give some more color on the commentary you provided earlier today in your strategy update on potentially coming to the debt markets in the near future. And more specifically in terms of time lines as well as Russia now. So whether that be sort of addressing the high proportion of floating rate debt or whether this move is potentially be something which have been planned for a bit longer term? And then secondly, if you were to come to the market and fixed rate debt, what would be the advantages, I say, of hedging?

I'll let Yariv address that.

So in our debt structure today, so we have some portion, which is held by the underwriter, and this part was always planned to be syndicated. We are talking now about GBP 350 million, which were the delayed draw facility, which we used recently in order to pay back the 2026 bond of William Hill. In terms of time line, so as we mentioned in the announcement this morning, this is whether the next few weeks or the next few months that we will go to the market. In terms of changing the overall cost of debt, I wouldn't expect that to have any material impact on the overall cost of debt. But we do expect that to help in terms of the overall hedging plan that we have in place and we are shooting for at least 50% of the debt to be fixed in interest.

I mean in terms of the remaining TLA, would you plan to come back to address that as well? Or...

So assuming you are referring to the other TLA -- the Euro TLA, so this is now held by underwriter, who are happy to keep that in the balance sheet. So this is not going to be syndicated in the near future.

Just -- sorry, one really important point to add on. Our first major maturities in 2027. So we have a really long-term cap structure. Any further questions from the room? Ivor?

Just carrying on that point, is there an obvious point that we should know about the cost of refinancing, any of this expensive debt earlier? You mentioned the maturity in '27. Is there an obvious date, which has a cliff edge, suddenly it would get cheaper in terms of make whole costs and fees? Or is it just linear out to the maturities?

The maturities for '27, '28. Now it's reasonable to assume that in few years, when we start to deleverage, we will have the possibility to actually refinance and reduce the overall cost of the debt, and we will definitely would do so when we will be in that position. So if we were talking about being below 3.5x net debt-to-EBITDA in end of 2025, that's pretty much the time you can think about possibility to start looking into a possibility to reduce the cost of debt.

I got the mic again. Just on the U.S., it's relatively minor now, but is the Sports Illustrated brand relevant to a casino-focused strategy? Or is there another leg U.S. strategy to discuss with us later?

It is based on the research that we did. First of all, Sports Illustrated is a household brand in the U.S. that appeals to a significant slightly older male audience as Vaughan described them before. They're also interested in casino games, which we found out through research. And so the fact that the brand is associated with sports does not mean that it's not relevant for casino as well. And the plan is actually to engage with the players through sports betting and sports content, but to offer them a very relevant casino experience. I don't know if you saw on the slides, we already integrated the wheel mechanism there, which is a sports-related kind of lucky sports theme, the wheel for a casino. We've actually took some -- we're developing proprietary games themed with Sports Illustrated iconic images and created a slot game with them. So we are bringing the Sports Illustrated life into the casino as well.

The first market for this would be Michigan. So we will go live with Sport Illustrated Casino in Michigan.

Question? James, do we have -- if there aren't any more questions in the room, then maybe we can address some questions from the online.

Yes. So there's some. A number of them have been answered I won't go through them but could you update on the Netherlands licensing situation and potential launch date there?

Yes. So Netherlands licensing situation, so we're still in the process of obtaining a license. And I assume we will get a license soon. But again, that's in process. And in the short term, we don't have a plan to launch Netherlands in 2023 because of the other integration priorities from a technology perspective, then we are probably going to delay the launch of Netherlands to a year after that.

And then you talked about continued product development, but then there's a significant amount of CapEx synergies. So will the reduced CapEx of GBP 90 million, does that mean you are hindering your product development with reduced CapEx?

Yes. So even with the reduced amount of CapEx. Obviously, that's a combined CapEx of both groups. Even with the combined reduction, the reduction in CapEx is mainly from products and developments and platforms that William Hill developed in the last few years, and we are essentially moving investment out of those platforms. So for instance, they had a whole new gaming and betting platform that was built in the last few years. This is obviously after we made the choices of platform that has to become redundant. So we're reducing investment out of there, and that took an immediate effect. So a lot of that is coming from areas that we're not investing in, but we are maintaining product capabilities in our core platform, and we will continue to deliver product development alongside the focus on migration and integration into -- from William Hill, Mr Green into the 888 platform.

And then you've talked about reducing debt. Are there any other ways to reduce debt faster, such as any sales of noncore assets?

Yes. So we're looking at all kinds of ways to reduce debt. We're always considering things like sales of noncore assets, but there is nothing specific to report on at this moment.

Then in terms of the U.K. expectations for low single-digit revenue decline, is this in line with what you think the market will be doing? And does that include any impact of the white paper?

Yes. So it's a good question. So the market -- I mean, the different players in the market, we're hearing similar things somewhere between flattish, maybe low single-digit growth or low single-digit decline between the different operators. I think there are a lot of changes that were made into -- specifically into our systems, both on 888 and William Hill in terms of the processes. In terms of the threshold, which both Phil and Harinder mentioned in the presentation that already essentially took what I think is going to be a large part of the impact of the changing regulations. If I can say that's been taken fully, we don't know until the regulations will come up. But definitely, all the mitigation steps that we took in the last year will reduce the impact of regulatory changes that will be coming soon.

And then there's only one more on the online system for now, which is the -- can you just talk about general macroeconomic conditions and where they are today versus where you are last year? And how much of an impact has that had on your plans?

I'll let Yariv address that one.

So in general, in the presentation today, you could see that the decline in revenue that we see in the U.K. is not coming actually from a lower number of active or lower engagement, it's actually coming from the ARPU. And when you look at the massive decline in output, it's 23%. This is a combination of all the safer gambling measurement that we added into our platform, but it's also possibly taking into consideration also market condition and the pressure on the consumer. It's very difficult, obviously, to say how much is each component comprised out of this, but this is definitely within the number already.

James from Barclays. Just could you comment on whether you're seeing any of those sort of slowdown in ARPU trends in other markets beyond the U.K. So you said it's a combination safer gambling.

More significantly in the U.K.

And any other markets you'd like to call out?

So the reason why we think the decline in ARPU is more related to safer gambling than the consumer situation because we see it in a massive way more in the U.K. So that's actually would give us the feeling that this is less about the current market condition and more about the safer gambling measurement.

And just on U.K. retail, I think the presentation says a continuation of the revenue trends you see at the moment into next year. Could you talk about how the retail estate indexes to certain demographics? And why you're confident you can sustain that revenue trend, I guess, they're more -- you're more exposed to lower income individuals?

Not necessarily. I mean, certainly, the demographic is older as a more traditional pattern. So we'll find lots of repeat visits, very low spending levels sustained over a longer period of time. And what we use our colleagues to do is to ensure that we can intervene if we see anything different. And I think if to take any view to one of our shops, but what you'd see immediately is most of our colleagues know every customer in that shop, I mean, literally by name, and they can tell when something is changing. So if something changes, we interact, we do interaction with that customer and we find out what's happening. And we're able to, therefore, intervene very early. What that leaves then is a very predictable, consistent trend, and we could spot if someone was in an unaffordable position because they have some kind of life event or indeed, they were struggling under a cost of living crisis, specifically for that customer, we would obviously slow their spend down. But in aggregate, we're not seeing that. And what we're seeing is that the customers continue to visit the shops and indeed we do provide free in our shops. So potentially, that's a small advantage, too. So I think what I'm very confident about is that the mechanisms to spot of something was starting to go wrong are very clear, and we have thousands of colleagues really well trained to spot it. so far, we're not seeing any of those negative signs.

We need to get more people into the shop, so they can see what it's like -- it's sort of 1,000x a week on average spend per shop the colleagues in there know pretty much everyone who's coming in. They're a bit like your local cafe, your local pub. It's a really sort of regular trade where people -- that's what they do with their spare time. And as Phil said earlier, GBP 12 on average, it's sort of low-cost entertainment go watch a couple of races, check the football results. Okay. Thank you, everyone. Thank you for your participation and for the patience. I know it's a late afternoon. And we'd now like to welcome everyone for some drinks and informal chat and some Thank you very much.