Flutter sees FY group and US revenue growth amid operating losses

Flutter has published its 2021 preliminary results, reporting YoY revenue growth, but a decline in group adjusted EBITDA and operating losses.
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Flutter has published its 2021 preliminary financial results, reporting year-over-year revenue growth as a group and in the US, but a decline in group adjusted EBITDA due to increased US investments and international regulatory impacts and operating losses.

In response to the financials, CEO Peter Jackson has stated he believes the company is “exceptionallly well positioned for future growth” thanks to the progress made over the past year.

In its preliminary results for the year ended December 31, 2021, Flutter has declared group revenue growth of 37% YoY to $8.1bn (2020: $5.9bn), which it attributes to recreational customers, as its average monthly players (AMPs) improved by 23% to 7.6 million.

The company added that its merger with The Stars Group (TSG) in May 2020 was a key driver behind its revenue growth.

However, the increased investment in the US during the year, regulatory impacts internationally, and challenging sports results caused Flutter’s group adjusted EBITDA to fall by 18% YoY to $1.34bn (2020: $1.65bn). Excluding the US, the group adjusted EBITDA for the year came in at $1.67bn, a 10% decrease YoY (2020: $1.88bn). 

Flutter recorded a net debt for 2021 of $3.55bn (2020: $3.78bn) following a loss before tax of $386.6m, after a $728.9m charge for non‐cash amortisation from acquired intangibles.

CEO Peter Jackson commented: “2021 was another strong year for the group as we made good progress against our strategic objectives and grew our recreational customer base to over 7.6m customers.

“Yesterday we launched our new sustainability strategy, our ‘Positive Impact Plan’, which will see Flutter set a positive agenda for future change. Through this strategy, we will build on the significant progress already made in areas such as safer gambling and measure our performance against defined goals to demonstrate how we are responsible leaders in our industry.”

In the US, Flutter’s FanDuel continues to be a market leader with revenues improving by 113% to $1.9bn, taking a 40% online sportsbook market share in the fourth quarter.

Overall, the US has become the group’s second-largest division, overtaking the International division in the past year. The group notes that leveraging the ‘flywheel effect’, it is on the path towards profitability in the region.

FanDuel sportsbook and gaming business delivered a positive contribution in 2021 of $14m, with faster adoption rates of sports betting driving states contribution positive after 12 to 24 months thanks to higher levels of customer acquisition, better customer retention, and product advantages. 

As a result, Flutter believes it remains on track to deliver a positive EBITDA in the US in 2023.

“In the US, we delivered over $1.9bn in revenue, leveraging our differentiated product proposition to remain the number one sportsbook in the market with a 40% share,” Jackson stated.

“Despite our scale, we retain a challenger mindset; this year we launched a number of new features to our market‐leading same game parlay product, maintaining our competitive advantage in sports. I’m also pleased to see the progress on our path towards profitability; FanDuel sportsbook and gaming business delivered positive contribution in 2021 for the first time, a significant milestone for the brand.”

Looking ahead to 2022, Flutter noted that trading in the first seven weeks of the year has been in line with expectations with group revenue up 2% YoY, reflecting strong comparatives which benefited from very favourable sports results.

Assuming a normal run of sports results, the company expects revenue growth to accelerate as 2022 progresses, reflecting the phasing of sports margin comparables and safer gambling measures taken in 2021.

Flutter stated that it is monitoring the ongoing aggression by Russia in Ukraine closely, adding that since the completion of its merger with TSG, it has materially reduced its exposure to the Russian online market. In 2021, Russia accounted for $55m of its total group earnings, while Ukraine represented a $25.5m contribution.

Jackson concluded: “Notwithstanding regulatory changes in Germany, Netherlands and elsewhere, we saw good momentum across key markets such as Brazil, Canada and Georgia. In addition, the announcement of our acquisition of Sisal will further enhance both the quality and shape of our International division.”

“Overall, I am pleased with the progress we have made during 2021 and believe Flutter is exceptionally well positioned for future growth.”