Flutter turbocharges AUS & US growth as EURO headwinds mount

By | November 2, 2021

Flutter Entertainment Plc continues to underline its operating efficiency to help match its global scale demands and strengthen its brand portfolio’s leading position across multiple markets. 

Posting its Q3 trading update, The FTSE100 betting group registered corporate revenues of £1.43 billion up 9% on corresponding 2020 results of £1.32 billion. 

Topline growth was attributed to Flutter maintaining a double-digit increase in active monthly players to 7.2 million (2020: 6.4m) – despite its sportsbook portfolio trading against tough 2020 comparatives.

Q3 sportsbook performance registered combined revenues of £906 million (+13%), as the Flutter’s igaming revenues were stable at £534 million (+1%).

“Flutter delivered a strong third-quarter performance, with double-digit growth in our global player base,” explained group CEO, Peter Jackson. 

“This resulted in the Group delivering revenue growth of 12% despite challenging comparatives including a concentration of key sporting events in the prior year.”

Trading against tough comparatives and the easing of lockdown conditions, Flutter’s UK&IRE home market performance registered a 5% decline in revenues to £491 million (Q32020: £519m).

Despite performance drags, Flutter underlined continued progress within saturated UK&IRE online markets as its brands continue to increase their ‘recreational customer growth’ registering a 19% increase in active player numbers.

Paddy Power retail estates fully opened during Q3 trading, registering revenues of £68 million (-6%), as unit performance was dragged down by continued COVID-19 restrictions applied in Ireland.

The group maintains optimism in its retail recovery, as Flutter cites that overall retail unit revenues were around 90% of 2019 levels. 

A breakdown of international units saw Sportsbet Australia continue its double-digit growth momentum recording a 20% revenue uplift to £370 million, benefitting from a 24% growth in active player numbers to 1.1 million.

Registering a 15% increase in sportsbook stakes and net revenue margin increased by 40 basis points to 11.1% – Flutter underlined that Sportsbet Australia had surpassed all year-on-year expectations.

Mirroring wider industry impacts, the Q3 performance of Flutter’s PokerStars unit was impacted by German market adjustments and tax changes – demonstrated by PokerStars’ 3% decline in revenues to £299 million.

Providing a group-wide forecast (excluding US metrics), Flutter cited that unfavourable sports results in the first 24 days of October would impact EBITDA by circa £60m.

Flutter further anticipates an expected £10m EBITDA impact in Q4 from temporary Netherlands exit, whilst adjusted EBITDA expectations for 2021 now expected to be £1.24 – £1.28 billion.  

 “Across our business we continue to lead on customer protection and we recently announced measures to enhance the protection of younger customers in the UK & Ireland as part of our risk-based “Triple Step” approach to affordability,” Jackson continued.

“While a run of customer-friendly results in October have resulted in win margins being below expected levels in the quarter to date, the underlying strength of our business is clear; we have grown our online recreational player base by 46% in just two years . With more international jurisdictions and US states on the path to regulation, we look forward to sustainably growing our global player base further in 2022.”

With regards to Flutter’s stateside operations, Jackson detailed that the group had maintained its ‘leadership position’ in the rapidly growing market, having experienced a 85% uptake in revenue to secure 42% of the total sports betting share in Q3.

Total US-driven net revenue stood at $280 million and the number of average monthly players reached 1,312 – representing an increase of 85% and 17% on Q3 2020 respectively – whilst high turnover driven by the SuperBowl was ‘handled comfortably’ by FanDuel.

Flutter’s US market guidance remains unchanged at £1.285bn – £1.425bn revenues with Adjusted EBITDA loss expected to be between £250m and £275m –  results include a £15m impact from adverse sports results in October.

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