Operator
Hello everyone and thank you for joining the Entain 2026 Q1 Trading Update. My name is Lucy and I'll be coordinating your call today. During the presentation, you can register a question by pressing star followed by one on your telephone keypad. If you change your mind, please press star followed by two to remove yourself from the question queue. It is now my pleasure to hand over to Stella David, CEO, to begin. Please go ahead.
Thank you and good morning everyone and welcome to today's Q1 results call. I am delighted to be speaking to you again and sharing another strong set of ENTAIN results. I'm also very pleased to be joined by Mike Snape for his first ENTAIN update, so welcome Mike and it's great to have you on board. This morning's call will broadly follow our usual format. I will begin with an overview of the quarter, then Mike will take this opportunity to share some initial reflections before he runs through the Q1 trading performance, and then we will finish with your questions. So let's get started. Entain continues its positive trajectory. Our diverse and globally scale portfolio of podium positions is a powerful engine which is proving it can deliver consistent and sustainable growth. We maintain our relentless focus in executing against our strategic priorities. Wichita's exit last year with stronger momentum and this has continued so far this year. I'm also very proud of the leadership team we have in place, who are focused on increasing both our pace and our capacity, enabling us not only to do more, but also continue to improve our delivery. Now turning to Q1. The grid delivered results in line with expectations. Net gaming revenue was up 3%, within which online was up a healthy 5%. Importantly, Q1 being in line was despite most markets experiencing, particularly customer-friendly sports results. So a better reflection of our underlying performance and momentum is volume growth. In Q1 our volumes were up 8% with an impressive plus 10% for online. Our online NGR and underlying volume growth has not only accelerated from our 2025 exit rates but continues to come from across our portfolio and I'm delighted that Q1 marks our eighth consecutive quarter of online growth. The UK, once again, was a standout performer, delivering another great set, great quarter. We were fully, and we fully expect to have gained both share in online and retail. This sets the world to withstand the impact of the draconian tax increases better than the competition. And a point worthy of note, we paid 574 million pounds in UK taxes in 2025. whilst the growing black market pays zero tax. Hence, we remain focused on lobbying government to take action to stop the advertising and promotion of these unlicensed sites. Australia's recovery continued and is now back to meaningful year-on-year growth, and we expect to continue to having made solid market share gains. So a great performance which reflects the new management's disciplined and reinvigorated approach. Elsewhere, Spain, Canada, Greece, Georgia, and New Zealand all continue their double-digit MGR growth. A market that's been steadier than anticipated this year is the US. Now, I won't repeat it in detail, but as you heard from Adam earlier this week, BestMGM continues to execute its plan, deliver profitable growth, and remaining rational in a noisy market. This disciplined approach allows them to remain comfortable of delivering EBITDA still within in their guided range, albeit at the lower end, despite softer top line growth. And our foundations improve operational execution and are back to delivering high quality top line growth. And we have a strong pipeline of activities to continue that journey. These include the many opportunities from AI enablement, improvements to player journeys, and exciting new features such as side bet jackpots, revamping the UK Ladbrokes app, and a supporting interaction brand in Canada going forward in a very positive way. The wider rollout of SportingBot, our new AI assistant ahead of the World Cup, as well as deepening our engagement with sport fans across Europe with new campaigns and partnerships. We're focused on driving greater efficiency, effective capital allocation, and as I have flagged before, we are fully committed to strong cash generation. So, just to summarize before I pass to Mike, we have started 2026 with strong momentum. The business is well positioned, getting sharper every day, and we are navigating the impact of the UK tax raises as well as anyone. We are reiterating our full year guidance and remain confident in generating over 500 million of cash annually from 2028. We have a strong team and a busy pipeline of initiatives and I'm excited about the opportunities in the year ahead. And while it is early days, Q2 has gone off to a strong start and we look forward to the World Cup in June. And on that note, over to Mike.
Thanks Stella. Good morning everybody. I'm delighted to be here. Before I talk through the Q1, and Stella's really captured the key headlines already, just a few thoughts on first impressions and a flavour of what we've been focused on. I think it goes without saying, this is clearly a strong business with us in March and this...
Operator
If you ask a question, please press star followed by one on your Telefine e-pad now. If you change your mind, please press star followed by two. When preparing to ask your question, please ensure your device is unmuted locally. The first question today comes from Ed Young of Morgan Stanley. Your line is now open. Please go ahead.
Good morning. Good morning. Two questions, please. first of all on the uk uh you cited some chips in the competitive dynamics i wonder if you've seen anything so far already obviously the uk growth numbers are very strong momentum to be entering that change anyway but wonder if you could just give a bit more color there and what you're seeing and then second of all a similar question on australia as you mentioned a long time since we've seen double-digit growth how much that is market level support how much that is share gains and I guess how do we stitch together the result with the changes from the leadership change we've seen down there and the changes that we've made to business.
Hi, Ed. Nice to hear your questions. Let me try and answer those two for you. So I think the first question was, have we seen what impact have we seen in the UK since the taxes went up at the beginning of April? It's really too early to say. I think the more important point is that we have definitely been increasing our share in the UK in advance of those tax increases and part of our strategy is to continue to increase share and certainly in gaming if you look at the market there is a long tail of tier to share game. It's very important that we continue to lobby with government to encourage them and others to market share games. I think the team there is doing a great job. we've been very strong historically in racing they're expanding the focus which is a really good opportunity for us because the market is much wider than racing even though that's very important so I think the team there have got a good strategy and we're hopeful that we'll continue to build share Thank you Thank you The next question comes from Estelle Weinberg of JP Morgan Your line is now open Please go ahead Hi, good morning
Thanks for taking my questions. First, can you comment on the phasing of margin progression, H1 versus H2, when you have the UK getting taxed starting in April, which will therefore be more impactful in H2, but the phasing of the World Cup-related investment is likely to be more H1-weighted in June, I believe, and organic growth will likely be more H2-weighted given sports comps across international and CE. Any color would be helpful. Another question on the U.K. as well. Can we get a – maybe it would be helpful to get a clearer read on what's driving the U.K. market, particularly sports. How do you see the competitive environment evolving into the World Cup, and is there anything notable you'd highlight perhaps in terms of data product developments? And if I may, just the last one on Brazil. We've now seen unfavorable sports results for, like, I think over the last three quarters. Can we get an idea of what's the underlying volume growth in Brazil at the moment?
So, I think we've got three questions there. One is about margin progress during the year. The second one is more of a read on the UK and the complexity of the environment and Brazil unfakable sports results.
I think we picked up the modeling questions offline with the IR team and just go.
I think that's probably the easiest way of dealing with it. So, we'll do a follow-up with IR. In terms of the UK, in terms of what's happening, I think we've been on a journey of increasing market share over the last 18 months or so. Our customer journeys have improved from added in. We've got new features that continue to come out. We've got better bet builder, both in football and in horse racing. We've also got a new Lackbrook experience which is coming out in advance of the World Cup. kind of phasing to go on into July. And so therefore it does straddle both. At my observation on the World Cup, it will be great for volumes, but it's going to be a bit of a rollercoaster ride because in the early days there were many more teams playing and margins could be wildly fluctuating because there'll be high-scoring lopsided games. I think towards the second half of the World Cup, it will be more equally based. There'll be some lovely upsides there, particularly given that most of our markets are in the World Cup. you know with the exception i think of italy and poland who were expected to qualify most of our other markets are playing in that and brazil yeah you're absolutely right sports margins have been very poor in q1 volume's been up margins that we have seen in the short term and let's see how that goes but underlying volumes have been positive thank you the next question comes from ben shelley of ubs your line is now open please go ahead hi good morning team and congratulations mike on the new role uh couple questions from me one in terms of your group online sports wager growth or even
more broadly group volume growth can you give us a bit of an idea how much you think you have benefited from recycling in the quarter or rather how much you think uh how much of this is simply strong underlying business performance and then i guess on online volume growth versus the four year guidance. Online volume growth is at 10% in the quarter and you have the World Cup ahead of you alongside momentum across the business. How are you thinking about that 5% to 7% online revenue guidance for the full year?
I think on the recycling point it's really difficult to say and clearly there's a lag in terms of...
Operator
A reminder to ask a question, please press star followed by 1 on your telephone keyboard now. The next question comes from Rasmus Engberg of Capital Chevrolet. Your line is now open. Please go ahead.
Yes, hi. Thanks for taking my question. I was just wondering about the World Cup. How much of your 5% online growth is sort of relating to the World Cup and how much is underlying?
Okay, so from the World Cup, thanks for the question. Even as you might think, I mean, it's worth about 1% or something like that across the year. It's really where we would anticipate that's an upside. You know, it's as dramatic as you go to recognize the point I made earlier is that we shouldn't over, over what it's going to give because I think there will be some volatile sports margins, particularly in the early half of the whole, the whole opportunity because that's when you get a lot of people are interested in signing up to apps. So I think it's more about that, the recruitment side of it where I say you get the big value from it. It's an exciting, it's an exciting activity. I think it would be good for some of our markets, particularly the ones which are in the same time zone. So, you know, pick markets like Brazil will be very engaged in it. Markets like Australia and New Zealand also will be very engaged because it's about basically watching it live. But, you know, that's kind of where we're at. It's a positive, but it's not a major driver of overall numbers.
And, sorry for just a follow-up question. From an earnings perspective, I guess, But for this year, it might be invested in attracting and reactivating customers rather than driving earnings in the short term.
Exactly, it is more of a recruitment drive than anything else, yeah.
Operator
Thank you. The next question comes from Hravan Gondel of Barclays. The line is now open, please go ahead.
Hello, good morning. Thanks for taking my questions. Firstly, on Poland, are you back to winning your sort of lost shares in the, lost market share in the country now you have done the migration? And what's your sort of outlook on the iGaming regulation in Poland? And is there any sort of update on iGaming rollout in New Zealand since full year results and other regulatory updates elsewhere in the world?
Okay. I'll take that one. So in Poland, we've always had a process of making sure we have maintained a profitable business. Yes, I think most people know there have been a lot of new entrants to the market that have gained share but at a very high cost. What I think is encouraging is, and I think, before I go that far, I think we make the vast majority of all profit that is made in Poland based on our common sense approach to the numbers. I think what we're seeing now is some encouraging signs that are starting to gain share back off the back of continuing to support the brand, which is the migration, as you mentioned, bearing fruits future. I mean, the current regime there is not open to iGaming at the moment. And so I think, you know, in the medium term, we would suggest that, yes, legislation for iGaming will come through, but I wouldn't be putting into any forecast right now. If you go to New Zealand, iGaming is 37. There's going to be a toleration regime put in place from May. What's exciting about that is we have the only legal betting sites, which is with TAB, the New Zealand government that we have. And so when iGaming comes out, there's only about 15 licences that are going to be allowed, of which we will have TAB, which will be the only one that will be doing casino and sports. and we're hoping to have two other guns as well. Out of those 15, learning is very positive. But the majority of the impact of that will start to hit from 2027 when we can start to advertise and promote.
Operator
Thank you very much. Thank you. The next question comes from Jamie Bass of Citigroup. Your line is now open. Please go ahead.
Good morning, guys. Thank you. Just one question from me, please. Stella, as a follow-up on what you were saying there about using the World Cup as a recruitment driver, I was just wondering if you have any data from previous World Cups or potentially the Euros on retention once you have sort of acquired customers who are downloading the app for the first time. Once the World Cup is over, do you have any data on whether they then engage in other leagues such as the Premier League? Thank you.
So we have lots of data about retention and value of customers. We have a team who work on, I've lost the word actually. I've got a cold, so my brain's a little bit foggy. But performance marketing, that's the word I was looking for, performance marketing. Our team who do performance marketing across most of the world now are really, really strong at getting understanding the payment, payback, the recruitment efficiency that we get from investing in areas like this. So actually it's kind of day to day BAU stuff that we do with that team. It's a 365 course team that do most of our performance marketing around the world and we would apply the same rules to that as we do for the World Cup as we do for any recruitment drive so we're very hopeful that we will get some strong retention off the back of the activities we do and just to add to that so we get well soon I'm sure it's it my meds with me this time I'd like to have that Stella started we believe we're firmly underpinning our 2026 expectations if you have any follow-ups then please do contact the AR team who will definitely be there to help and on that note thank you and
