ANNUAL
REPORT AND
ACCOUNTS
2023
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SUPPLEMENTARY INFORMATION
888 HOLDINGS PLC
WELCOME TO OUR ANNUAL REPORT
888 Holdings is one of the
world’s leading betting and
gaming companies and the
parent company for a range of
internationally renowned brands
including William Hill, 888, and
Mr Green.
Our vision
Our vision is to make life more
interesting.
Our mission
Our mission is to delight players
with world-class betting and
gaming experiences.
A range of leading brands
Read more about us on our website corporate.888.com
ANNUAL REPORT & ACCOUNTS 2023
FINANCIAL HIGHLIGHTS 2023
We track the following key financial and
non-financial performance indicators ('KPIs').
These KPIs allow us to assess our progress
against the Group’s strategy and help inform
decision making.
These KPIs are also some of the
most commonly used KPIs for external
stakeholders, particularly our
shareholders, when assessing the
performance of the Group.
REVENUE (£M)
ADJUSTED EBITDA (£M)
£1,711m
£308m
2023
£1,711m
2023
£308m
2022 Actual
£1,239m
2022 Actual
£218m
CONTENTS
STRATEGIC REPORT
At a Glance
Chair’s Statement
Chief Executive Officer's
Review
Investment Case
ESG and Sustainability
Stakeholder Engagement
Chief Financial Officer's
Report
Risk Management
2022 Pro forma*
£1,850m
2022 Pro forma*
£311m
Viability Statement
ADJUSTED EPS
10.7p
2023
2022 Actual
LEVERAGE
5.6x
10.7p
2023
15.1p
2022 Pro forma*
GOVERNANCE
Board of Directors
Corporate Governance Report
5.6x
5.6x
Nominations Committee
ESG Committee
Audit & Risk Committee
Remuneration Committee
Directors’ Remuneration
Report
Directors’ Report
FINANCIAL STATEMENTS
02
04
06
09
10
22
24
30
42
44
46
52
54
56
62
66
83
Adjusted EBITDA is defined as EBITDA
excluding share based payment charges,
foreign exchange losses and exceptional
items and other defined adjustments. Further
detail on exceptional items and adjusted
measures is provided in note 3 to the
financial statements.
Average monthly players (AMPs) represents
the total number of players who have
placed and/or wagered a stake and/
or contributed to rake or tournament fees
during the month. The figure reflects the
average of the monthly figures for the
relevant reporting period.
Pro forma metrics, which are unaudited,
reflect the results as if 888 had owned
William Hill for the whole of 2022 and
excludes the results of the 888 Bingo
business that was sold in 2022.
Independent Auditor’s Report
90
Consolidated Income
Statement
Consolidated Statement
of Comprehensive Income
Consolidated Statement
of Financial Position
Consolidated Statement
of Changes in Equity
Consolidated Statement
of Cash Flows
Notes to the Consolidated
Financial Statements
Appendix 1 - Alternative
Performance Measures
Company Balance Sheet
Company Statement of
Changes in Equity
Company Statement of Cash
Flows
Notes to the Company
Financial Statements
SUPPLEMENTARY INFORMATION
Task Force on Climate-Related
Financial Disclosure (TCFD)
Report
ESG supplementary data
Shareholder Information
Company Information
100
101
102
103
104
105
155
157
158
159
160
163
176
178
178
01
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SUPPLEMENTARY INFORMATION
AT A GLANCE
A global leader with world-class brands
Our locally licensed operations and offices
Incorporated in Gibraltar, and
headquartered and listed in London, the
Group operates across numerous locally
regulated markets and has offices around
the world.
LOCALLY LICENSED MARKET
1. UK
4. Jersey
7. Spain
10. Malta
2. Gibraltar
5. Germany
8. Italy
11. Sweden
3. Ireland
6. Romania
9. Denmark
12. Portugal
13. Canada (Ontario)
US:
14. Nevada
15. Delaware
16. New Jersey
17. Colorado
18. Pennsylvania
19. Virginia
20. Michigan
OFFICES
1. Ceuta
4. Israel
7. Poland
10. US
2. Gibraltar
3. Ireland
5. Malta
8. Romania
11. Bulgaria
6. Philippines
9. UK
10
17
14
13
20
18
16
15
19
REVENUE BY MARKET 2023
REVENUE BY PRODUCT 2023
UK (INCL. RETAIL)
68%
ITALY
9%
SPAIN
6%
DENMARK
2%
OTHER MARKETS
15%
No individual optimise market is >2% of
revenue
02
ONLINE BETTING
20%
ONLINE GAMING
49%
RETAIL
31%
888 HOLDINGS PLC 9
1
9
3
3
4
5
8
12
7
2
2
1
11
7
5
10
6
8
11
4
6
OUR OPERATING DIVISIONS
UK&I
ONLINE
Our sports betting and gaming brands
are some of the most popular in the UK&I
market. William Hill and 888casino are
our flagship brands, offering market-
leading products to millions of customers
every month.
UK
RETAIL
Our William Hill retail estate has been a
permanent fixture on the UK high street
since 1966. We now have a portfolio of 1,343
shops offering exciting betting and gaming
products to millions of customers all across
the UK, complementing our online offering.
INTERNATIONAL
ONLINE
Our International division serves customers
worldwide using our range of world-class
brands, with a primary focus on our other
core markets of Italy, Spain and Denmark.
REVENUE
£658m
REVENUE
£535m
REVENUE
£517m
AVERAGE MONTHLY ACTIVES
# OF LBOS AT DEC-23
AVERAGE MONTHLY ACTIVES
1.2m
1,343
0.5m
03
ANNUAL REPORT & ACCOUNTS 2023
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SUPPLEMENTARY INFORMATION
CHAIR’S STATEMENT
From challenge to opportunity:
embracing the future
INTRODUCTION
2023 was a critical year for the Group,
navigating significant regulatory change
and laying the foundations for significant
value creation. Through the year the Board
has overseen a fundamental shift in the way
we operate, and we entered 2024 with a
strengthened executive team to deliver long-
term sustainable growth.
The 2023 financial performance was
impacted by some significant regulatory
and compliance headwinds. Additionally,
the Group experienced the industry-wide
continued challenging trading conditions
resulting from changing regulatory and
competitive dynamics, along with a wider
backdrop of macroeconomic uncertainty
for many consumers with continued high
inflation and interest rates.
Having spent much of 2023 as Executive
Chair of the Group, I had the benefit
of witnessing firsthand the significant
opportunity that exists within the Group.
Following the appointment of several first-
class executives – and following my return
to the Non-Executive Chair role – I have
never been more convinced that we are well
positioned to unlock our full potential.
BOARD PRIORITIES
During 2023 I laid out three areas the Board
was focused on to ensure the long-term
success of the business. These were: our
team, ESG, and execution. I am pleased to
say we made strong progress against all
these critical areas during the year.
Team
In January 2023 we announced the
departures of both our former CEO and
CFO, with the CEO leaving with immediate
effect and the CFO leaving in October.
On behalf of the Board, I would like to
thank them both for their hard work and
dedication to the Group.
Following the departure of the CEO the
Board promptly conducted an extensive
and comprehensive search for a
successor. We were delighted to appoint
Per Widerström as the Group’s new CEO,
effective from 16 October 2023.
Per was the Board’s clear standout
choice amongst a number of high-calibre
candidates who we interviewed for the
role. He is an exceptionally dynamic leader
with significant and highly relevant industry
experience, and he has a clear vision for
the strategic direction and value creation
roadmap for the Group, more details of
which can be found in his Chief Executive
Officer's Review on pages 6 to 8.
As announced in September 2023, we also
welcomed Sean Wilkins as our new CFO on
1 February 2024. We were grateful to Yariv
Dafna, who remained in place as CFO for
an extended period to support a smooth
handover period, and to Vaughan Lewis,
our Chief Strategy Officer, who supported
as Interim CFO until Sean’s arrival.
The Board is delighted with the impact
Per has already made on the business,
including strengthening our broader Group
Executive team, and we look forward to
working closely together with Per and Sean
over the coming years.
ESG
We made significant strides in our ESG
efforts during the year, particularly in the
areas of sustainability and safer gambling.
In January 2023 we self-identified and
self-reported issues related to the certain
shortcomings in our compliance processes
related to VIP accounts in the Middle East.
Having identified the issue, the Board took
decisive action to suspend all relevant
accounts while the compliance team
investigated further, and only reactivated
accounts after ensuring compliance.
Following this, we engaged proactively with
the Gibraltar Gaming Commission in relation
to this issue and reached a regulatory
settlement during the year, with the Gibraltar
regulator being complimentary about the
proactive, swift, and robust remedial actions
we took, as well as the enhanced policies
and procedures that are now in place.
While these enhancements have had a
financial impact on our business, they have
significantly improved the sustainability and
quality of our earnings.
During the year, the Group reached a
regulatory settlement with the Great Britain
Gambling Commission (GBGC) relating
to social responsibility and anti-money
laundering failings at William Hill which
occurred in 2020 and 2021. Whilst the
failings occurred under previous ownership
and management, we took the findings
incredibly seriously, working collaboratively
with the GBGC on several initiatives which will
have a long-term, positive impact.
Lord Mendelsohn
Chair
04
888 HOLDINGS PLC IN A YEAR OF SIGNIFICANT
CHANGE, OUR PEOPLE
HAVE DEMONSTRATED
THEIR RESILIENCE AND
COMMITMENT, AND WITH
A NEW GROUP EXECUTIVE
TEAM IN PLACE WE LOOK
FORWARD TO UNLOCKING
THE GROUP’S FULL
POTENTIAL AND DRIVING
SUSTAINABLE PROFITABLE
GROWTH.
Board changes
Itai Pazner (former CEO) stepped down from
the Board on 31 January 2023 and Yariv
Dafna (former CFO) stepped down from the
Board on 2 October 2023. We welcomed Per
Widerström as the Group’s new CEO from
16 October 2023 and Sean Wilkins as the
Group’s new CFO from 1 February 2024.
During the year we also saw Andria Vidler
step down from the Board in September
2023 following her appointment to UK CEO
of Allwyn Entertainment. On behalf of the
Board I would like to thank Andria again for
her contribution to the Board and in her role
as Chair of the ESG Committee prior to her
departure and we wish her well for the future.
As part of my return to the Non-Executive
Chair role and reflecting the composition of
the Board and business priorities, we made
a number of committee role changes during
the year, with the current committees and
memberships outlined on pages 44 and 45.
The Board will continue to review Board
composition, size, skills, and diversity targets
during 2024.
Looking ahead
2023 held several challenges for the Group,
but we finished the year in a stronger
position, with the business set for sustainable
growth and significant value creation. Our
enhanced executive team has outlined a
clear plan for significant value creation, and
I have never been more confident about the
potential for the Group.
LORD MENDELSOHN
Chair
26 March 2024
During 2023 we conducted a full
independent audit, and the Board was
pleased with the findings.
As a Board, we are focused on building a
high quality, sustainable business. Whilst
we must acknowledge that both businesses
have historically fallen short of best practice
in this area, we have taken clear and
decisive action to ensure these failings will
not be repeated.
Our new governance structure is working
well and driving higher standards across the
organisation, meaning our business is in a
much stronger position moving forward.
As we enter 2024, we are focused on
ensuring we continue our efforts to improve
the sustainability and quality of the earnings
of our Group. Our ESG programme, including
the critical safer gambling component, is
fundamental to the long-term success of
the business. Further information relating to
our ESG commitments across our People,
Players and Planet pillars can be found on
pages 10 to 21 of the Annual Report 2023.
Execution
During 2023 we accelerated and increased
our synergy delivery, significantly improved
our compliance function, and refined our
marketing and customer approach to unlock
more sustainable future growth.
The Group’s top-line performance was
impacted by internal and external factors,
including our proactive shift away from
dotcom markets as well as the continued
implementation of enhanced safer gambling
policies and processes, particularly in the
UK. Further information on the financial and
operational performance for 2023 is set out
on pages 24 to 29.
As a result of these initiatives, combined
with our synergy acceleration, and improved
compliance and marketing approaches,
from a strategic and operational perspective
we finished the year in a far stronger position
than we entered it. We have all the key
ingredients for success, and while we have
laid good foundations and begun to see
the benefits of the combined business, the
financial performance of the Group must
improve.
In Per and Sean, I am very confident that
the Board has identified an outstanding
leadership team with the right capabilities to
lead the Group over the coming years as we
unlock our full potential.
05
ANNUAL REPORT & ACCOUNTS 2023 STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SUPPLEMENTARY INFORMATION
CHIEF EXECUTIVE OFFICER’S REVIEW
Value Creation Plan to deliver
sustainable profitable growth
INTRODUCTION
I am pleased to take this opportunity in my
first Annual Report as CEO of the Group
to write to our stakeholders and outline
our vision for the future, including our new
strategic framework and exciting value
creation plan.
The world of betting and gaming has
changed significantly over the past decade.
There has been a continued push towards
local regulation and ever-increasing barriers
to entry through significant compliance
requirements. This is coupled with rapid
technological advancements fundamentally
changing the way customers interact with
our products and brands.
What that means today is that for those
businesses seeking to follow the locally
regulated path, scale is critical. It is why
industry consolidation continues at pace
and was a key strategic benefit of 888
acquiring William Hill in 2022. Outsized
returns also accrue to those operators that
take leading positions within target markets.
To build leading positions, operators need
first-class brands, leading products, and
excellent people. Our business has these
key ingredients for success, but it has yet
to unlock its full potential, in part because
of the significant impact of regulatory and
compliance changes we have made in the
past two years.
RENEWED FOCUS AND A NEW IDENTITY
The regulatory and compliance changes
we have made in recent years in some of
our key regulated markets as well as in our
dotcom markets have changed the mix
of our business. As a result of this, coupled
with the integration activities undertaken
to date, the combined business today is
fundamentally different to the previous
individual businesses that made up the
combination.
The consumer brands remain as strong
as ever, but to reflect the fact that this
is a new company on a new journey, we
are proposing to change the name of the
Group to evoke plc. This will be subject to
shareholder approval at our upcoming
2024 AGM.
We look forward to sharing more about our
new corporate brand in due course, but we
believe that creating an identity that better
reflects the combined Group, our mission
and values, alongside the clear strategic
framework and value creation plan we are
announcing today, will better support the
business in reaching its significant potential.
MOVING FORWARD, CREATING VALUE
THROUGH CLARITY OF WHAT SUCCESS
LOOKS LIKE
In order for the business to achieve its full
potential, as well as having a clear Group-
wide vision and mission to explain why we
are here, it is critical that everyone in the
Company has absolute clarity on what
success looks like, including what we plan to
do, how we will execute our plans, and where
we intend to focus in order to maximise our
returns.
That’s why since joining the business on 16
October 2023 I have made rapid progress
in formulating our strategic framework,
translating this into a value creation plan,
and ensuring that everyone in the business
is fully aligned behind it through our One
Company programme.
CREATING VALUE
Starting with what we will do; we will deliver
high return on equity underpinned by the
following key principles:
1. Driving profitable and sustainable
revenue growth. We will deliver profitable
and sustainable revenue growth by
both increasing our player base and
by growing share of wallet with our
customers. We will utilise our improved
customer lifecycle management
capabilities to ensure strong sustainable
revenues, always underpinned by a
clear customer value proposition and
our uncompromising safer gambling
principles.
2. Improving profitability and efficiency
through operating leverage. We will
improve profitability by investing
into capability build up, in particular
through insights, AI, and intelligent
automation. Along with our ‘Glocal’
operating model and supported by our
proprietary technology, this will increase
our efficiency and deliver greater
productivity at lower cost, ensuring that
the operating leverage in our business
model delivers profitable growth.
3. Being highly disciplined with our use
of capital. Our financial leverage is
relatively high in the context of our
sector, but I firmly believe this will be a
significant positive driver of our return
on equity and will magnify the returns
that we will generate in the coming
years. Our business is highly cash
generative and we will use this cash
wisely to ensure we deliver profitable
growth and deleveraging, thereby
multiplying our return on equity.
Per Widerström
Chief Executive Officer
06
888 HOLDINGS PLC
EXECUTING OUR PLAN
Our success in achieving these goals will
be underpinned by our ability to drive
successful operational execution, which will
be my key priority over the coming years.
This is the how of our strategic framework.
Our focus will be on strengthening the
Group’s core capabilities and competitive
advantages to create a scalable platform
for profitable growth while being laser
focused on our customer value proposition.
This will comprise three key components:
• First-class and consistent customer
value propositions: Ensuring our distinct
brands and products are tuned in to our
customer needs, offering personalised
value with sustainability embedded into
every offering.
• Operational excellence driven by data
insights and intelligent automation:
This allows us to build scalability
to drive operating leverage, ensure
consistent execution, deliver high quality
outcomes for customers, and unlock new
opportunities for efficiency.
• A winning culture: We are committed to
fostering a culture that empowers our
colleagues to unleash their full potential
and contribute to our collective success.
In order to turn this into tangible actions,
drive execution and value creation, we
have created six strategic initiatives, which
provide the roadmap for delivering our value
creation plan:
1. Customer lifecycle management:
Building personalised and long-term
customer relationships which are
critical to sustainable growth, driven by
intelligent automation.
2. Customer value propositions:
Continuously differentiating our brands
from the competition and being relevant
to specific customer needs.
3. Operations 2.0: Leveraging AI and
automation to drive efficiency,
effectiveness, and scalability.
4. Product and Technology foundation:
Unifying our proprietary technology
platform while delivering outstanding
products that are aligned with our
brands and customer needs.
5. Winning organisation: One Company
with a 'Glocal' operating model that
has a shared culture that empowers
everyone in the business and helps us
to attract and retain the best talent to
power our value creation journey.
6. ESG: Integrating environmental, social,
and governance principles into our core
operations to ensure sustainable long-
term value creation.
WE ARE AT THE BEGINNING
OF AN IMPORTANT AND
EXCITING VALUE CREATION
JOURNEY. WE WILL
UNLOCK THE SIGNIFICANT
POTENTIAL OF THE
BUSINESS THROUGH
THE IMPLEMENTATION
OF A CLEAR STRATEGIC
FRAMEWORK AND BY
ACHIEVING OPERATIONAL
EXCELLENCE AND
PREPARING FOR STEP-
CHANGE VALUE CREATION,
EXECUTED BY A
FIRST-CLASS NEW
MANAGEMENT TEAM.
The above key drivers of return on equity
underpin our bold medium-term targets,
which further define what success looks like
for the Company:
• Revenue growth of 5-9% per year
• Adjusted EBITDA margin expansion of
100 basis points per year
• Leverage of below 3.5x by the end of
2026
2023 REVIEW
Product and technology:
• Successfully integrated William Hill’s Global Trading Platform
into 888’s proprietary sportsbook for certain sports, driving
additional revenue from the expansion of betting markets on
888 and reducing cost from more efficient use of suppliers.
• Launched Mr Green in Germany on the 888 platform and
commenced the migration of Mr Green in Sweden from its
legacy platform onto the 888 platform.
• Enhanced the AI-powered chatbot, rolling it out onto 888
brands, as well delivering several important safer gambling
updates, including adding the control centre product to
additional markets.
• Rolled out Section8 in-house games onto the William Hill
brand across all markets.
• Went live on William Hill Vegas with the 888 in-house AI
powered game recommendation engines.
• Installed over 3,000 new proprietary Self Service Betting
Terminals across our retail estate, with over 2,000
replacements and nearly 1,000 new machines to increase our
density per shop.
07
ANNUAL REPORT & ACCOUNTS 2023 STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SUPPLEMENTARY INFORMATION
CHIEF EXECUTIVE OFFICER’S REVIEW CONTINUED
MY COMMITMENT TO OUR VALUE
CREATION JOURNEY
We are at the beginning of an exciting
new journey. We will build on our strong
foundations through a clear strategy and
focused plan that will deliver sustainable
profitable growth and unlock significant
value creation. I look forward to updating
shareholders and our wider stakeholders on
progress against our plans over the coming
months and years.
PER WIDERSTRÖM
Chief Executive Officer
26 March 2024
REFINED MARKET FOCUS
Given outsized returns go hand in hand
with market leadership positions, it is more
important than ever in today’s regulatory
and competitive environment that we are
laser-focused on where we invest in order to
generate superior returns on investment.
Having reviewed our market focus approach,
we have redefined our market archetypes to
fall under two key categories: Core Markets
and Optimise Markets. This simplified
approach enables increased focus and
investment in our core markets, while
maximising cash flow from all markets.
We will remain laser-focused on our four
Core Markets — the UK, Italy, Spain, and
Denmark — which already generate
approximately 85% of our total revenue and
nearly 80% of our online revenue, and where
we have established strong positions. These
are markets that boast attractive long-term
growth potential, high barriers to entry,
and established regulatory frameworks. In
these markets we will continue to leverage
our local expertise and diverse brand
portfolio to increase market share and drive
sustainable profitable growth.
In all other markets, our Optimise category,
we will prioritise cash flow generation and
value maximisation through leveraging
our enhanced capabilities and scale. We
will identify future potential core markets
where we can target podium positions
with our improved organic capabilities or
through alternative strategic routes in the
coming years. At the same time, we will exit
unprofitable markets or monetise assets
through alternative operating models, such
as local partnerships.
NEW GROUP EXECUTIVE TEAM AND
OPERATING MODEL THAT IS FIT FOR
PURPOSE AND FUTURE PROOF
One of the key ingredients to success and
to drive value creation is having the right
people. We have some fantastic people in
the business, and an important part of my
job is to empower them to add real value
as we deliver our strategic priorities. A
critical part of this is ensuring we have the
most effective management structure and
operating model. Often this means fewer
layers, optimisation of spans-of-control,
and establishment of centres of excellence
to provide world-class service. Clarity of
accountability is also paramount.
Over recent months we have implemented
several changes to our organisational
structure to ensure it is fully aligned to
deliver our new strategic framework and
value creation plan. This has included the
transformation of our operating model into
a 'Glocal' structure with a revised Group
Executive team, with each member having
clearly defined areas of accountability
across the business. We have significantly
strengthened our Group Executive team with
seven new external hires to fill critical roles
across product and technology, operations,
commercial, finance, legal and growth.
We have assembled a truly top-quality
Group Executive team that will be laser
focused on delivering upon our strategic
framework and value creation plan and I am
absolutely confident we will unlock our full
potential.
2023 REVIEW CONTINUED
Business developments:
• Realised the full run-rate £150m of cash synergies by the end
of the year.
• Completed the sale of the Latvia business in Jun 23 for
consideration of up to £22m.
• Completed the sale and leaseback of the majority of the
remaining freehold retail units, receiving approximately £20m
in proceeds.
• Proactive mix shift away from dotcom markets driven by
significantly enhanced risk and compliance framework, with
c.95% of revenue coming from locally regulated or taxed
markets.
• Positioned the Group for the future regulatory change in the
UK with proactive safety actions including reducing thresholds
and limits. The shift in customer mix to lower spending
customers impacted market share during the year but has set
a strong platform for growth.
• Consistent growth in average monthly actives, with FY23 being
up +7% to 1.7m.
• Expanded retail presence in horse racing to 53 of 59 UK
racecourses
• Achieved best ever rate of contacts per active, with a unified
customer service team achieving consistently high satisfaction
scores and handling times, while automating an increasing
number of processes including chatbot to handle end-to-
end queries.
08
888 HOLDINGS PLC INVESTMENT CASE
Value Creation Plan to deliver high return on
equity from sustainable profitable growth
1.
WHAT WE WILL DO
2.
3.
DRIVE PROFITABLE AND SUSTAINABLE
REVENUE GROWTH
IMPROVE PROFITABILITY AND
EFFICIENCY THROUGH OPERATING
LEVERAGE
DELEVERAGE THROUGH DISCIPLINED
CAPITAL ALLOCATION
HOW WE WILL DRIVE EXECUTION
1.
2.
3.
FIRST-CLASS AND CONSISTENT
CUSTOMER VALUE PROPOSITIONS
OPERATIONAL EXCELLENCE DRIVEN
BY DATA INSIGHTS AND INTELLIGENT
AUTOMATION
A WINNING CULTURE UNLEASHING
OUR COLLEAGUES’ FULL POTENTIAL
Powered by clear group-wide strategic initiatives to deliver our plan:
I.
CUSTOMER
LIFECYCLE
MANAGEMENT
II.
CUSTOMER
VALUE
PROPOSITIONS
III.
OPERATIONS
2.0 (AI &
AUTOMATION)
IV.
PRODUCT AND
TECHNOLOGY
FOUNDATION
V.
WINNING
ORGANISATION
VI.
ESG
WHERE WE WILL DO IT
1. Core markets
2. Optimise markets
UK; ITALY; SPAIN; DENMARK
ALL OTHER MARKETS
DRIVING LONG-TERM VALUE CREATION WITH CLEAR MEDIUM-TERM FINANCIAL TARGETS:
5-9%
REVENUE GROWTH PER YEAR
100bps
ADJUSTED EBITDA MARGIN
EXPANSION PER YEAR
Below 3.5x
LEVERAGE BY THE END OF 2026
09
ANNUAL REPORT & ACCOUNTS 2023
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SUPPLEMENTARY INFORMATION
ESG AND SUSTAINABILITY
Overview
ESG has remained
fundamental to our business
strategy as we have worked
to integrate the 888 and
William Hill businesses. We
have a strong desire to be a
socially responsible business;
we want to protect our
customers from gambling-
related harms, ensure we are
a brilliant and diverse place
to work, and reduce our
impact on the planet.
10
INTRODUCTION
ESG has remained fundamental to our
business strategy as we have worked to
integrate the 888 and William Hill businesses.
2023 was a year of significant change
for the Group, but all of the changes we
make are underpinned by our desire to run
our business the right way, caring for our
players, our colleagues, the communities we
are part of, and the planet we live on.
2023 was a year in which we continued to
embed our ESG framework, ‘Players, People
and Planet’, across the enlarged business,
with several advances delivered across all
key workstreams, with progress discussed for
each area on the following pages.
More widely, we also improved the
governance surrounding our ESG strategy.
As well as Board-level oversight from the ESG
Committee (see page 54), our ESG Forum
meets monthly, with several representatives
from the executive team, alongside
senior business leaders from across the
organisation, acting as the steering group
for our ESG strategy. Key decisions were fed
into the Executive Risk and Sustainability
Committee, for further oversight by the
executive team.
This report details just some of the many
initiatives that happened during the year,
as we continue to make progress across all
these critical areas. We also had to face
some challenging issues head-on, including
two large regulatory settlements.
Early in the year the Group reached a
regulatory settlement with the Great Britain
Gambling Commission (GBGC) relating
to social responsibility and anti-money
laundering failings at William Hill which
occurred in 2020 and 2021. Whilst the
failings occurred under previous ownership
and management, we took the findings
incredibly seriously, working collaboratively
with the GBGC on several initiatives which will
have a long-term, positive impact.
Secondly in August we reached a settlement
with the Gibraltar regulator in respect of
certain shortcomings in our compliance
processes related to VIP accounts in
the Middle East. This followed our self-
identification and self-reporting of these
issues, highlighting the effectiveness of
our significantly enhanced compliance
processes. Having self-reported the issues,
we engaged proactively with the Gibraltar
Gaming Commission in relation to this
issue, with the Gibraltar regulator being
complimentary about the proactive, swift,
and robust remedial actions we took, as well
as the enhanced policies and procedures
that are now in place.
888 HOLDINGS PLC Significant changes and improvements
have been made in all related areas during
2023 and in preceding years, and we
believe our internal control environment
has never been stronger. We take our
regulatory responsibilities incredibly seriously
and compliance with them is a minimum
standard — in many areas we aim to go
beyond these minimum standards to ensure
the sustainability of our business.
Meanwhile, in the UK the long-awaited
government White Paper, ‘High Stakes:
gambling reform for the digital age’,
was published in April 2023. We remain
supportive of reform to gambling regulation
in the UK to ensure safer and more
sustainable play by our customers, including
through the creation of an ombudsman and
the introduction of a mandatory levy.
In light of, and in many cases prior to the
publication of the White Paper, we made
several changes over recent years to
proactively evolve our products in advance
of any potential regulatory change. This
has included the lowering of spending
limits on our slot games to £5-£10 and
the introduction of Financial Vulnerability
Checks. These involve us checking to see
if customers are exhibiting any specific
negative financial markers of harm.
The conflated issues of affordability and
financial risk continue to be a key point
of discussion in the UK. We support the
identification of customers who are in
serious financial distress, but believe this
to be a very different thing to checking
how much each customer can afford to
spend, an important nuance and something
that is sometimes lost in an often heated
public debate. More broadly we believe
that changes should be implemented in
a measured way that does not interfere
with the enjoyment of the majority of our
customers who do play safely.
11
ANNUAL REPORT & ACCOUNTS 2023 STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SUPPLEMENTARY INFORMATION
ESG AND SUSTAINABILITY CONTINUED
Players
Safer gambling is imperative
to the future success of our
business, and therefore the
Players pillar of our ESG
strategy is a key focus.
We recognise that for the
vast majority of customers
our products are fun and
exciting, but for a small and
important number gambling-
related harm is a real issue,
and we need to protect
those customers to the best
of our abilities.
12
888 HOLDINGS PLC This is not an area we have always got right
in the past and we are constantly working
to improve, redoubling our efforts to ensure
ongoing compliance with our regulatory
requirements while also stepping up our
wider investment in safer gambling.
KEY ACHIEVEMENTS IN 2023
We continued to evolve our products,
processes, and training to ensure we offer
strong levels of protection to our customers
wherever in the world they play.
Across our products, the use of deposit limits
continues to rise. We want to encourage
positive play in our customers and we
believe deposit limits are a key tool to help.
We will continue to educate customers about
the use of deposit limits.
We continued to expand our safer gambling
interactions with customers online across
all our brands. We sent over 1.3 million
messages to players based on individual
customer behaviours. In 2024, we will
continue to evolve our interaction strategy
to offer interactions bespoke to individual
customer behaviours.
On our 888 platform, over 70% of customers
now have access to our proprietary Control
Centre product as we roll the product out
across different jurisdictions. Control Centre
contains our enhanced safer gambling
toolset including a proprietary profit and
loss tool.
In our UK retail shops, further enhancements
across our safer gambling framework were
introduced. Over 127,000 interactions took
place with customers in the year, including
discussions of affordability of spend. We
also trialled a partnership with the digital
therapy provider, Anonymind, to provide
a strong referral pathway to treatment for
retail customers who may be experiencing
gambling harms.
More broadly, in the UK we gave over £10m
to charities voluntarily, as part of the final
year of our four-year commitment to fund
Research, Education and Treatment of
gambling harms. More details on these
programmes and how they help customers
are set out below.
Finally, to ensure up-to-date and thorough
oversight of our safer gambling strategy,
our Board received training from Regulus
Partners during the year, which was
designed to better educate around
gambling–related harms.
FOCUS ON...
Safer Gambling Week
We supported Safer Gambling Week again
in 2023, an annual initiative that saw us
partner with our main trade bodies, the
Betting and Gaming Council (UK) and the
European Gaming and Betting Association,
and join forces to promote a safer gambling
education campaign across the industry. We
went above and beyond and delivered safer
gambling messaging to all our customers
globally.
Across all our shops in the UK, we hosted
a full takeover of Safer Gambling Week
messaging. Posters were displayed in our
shop windows, as well as daily messaging
on our SSBTs and gaming machines.
Throughout the Group, we delivered safer
gambling messaging to our customers, as
well as promoting awareness of the event
across our social media accounts. The event
also featured in all our communications
channels, including through a daily all
company newsletter featuring articles,
interviews with key colleagues driving our
safer gambling approach, and videos of
work being done ‘on the ground’ through our
RET (Research, Education and Treatment)
partnerships.
We also organised a series of internal events,
which were broadcast to all our colleagues
in collaboration with our RET partner, EPIC
Global Solutions. Delivery leads from EPIC
gave workshops to colleagues, highlighting
the impact of their own personal experience
with gambling–related harm. Our CEO, Per
Widerström, also hosted a live webinar along
with our Chief Customer and Risk Officer
Harinder Gill and EPIC delivery lead Mark
Potter to talk about the Group’s approach to
safer gambling and how all our colleagues
must play a part in ensuring a safe and
enjoyable experience for our customers.
Research, Education and Treatment of
gambling harms
In the UK, our support for organisations
funding the Research, Education and
Treatment of gambling–related harm
continued during 2023, totalling over
£10m. This was in line with William Hill's
historic commitment to increase funding
year on year over a four-year period — a
commitment shared by other founding
members of the Betting and Gaming
Council (UK).
The main recipient of our donations was
GambleAware, who received over £6m.
Two additional projects were also funded,
delivering a step change in support for
vulnerable cohorts in society:
Horse Racing Industry
2023 marked the first full year of our
collaboration with EPIC Risk Management
to deliver a pioneering gambling harms
education programme in the horse racing
industry. Aimed at a cohort of people at
all levels in the industry who may be at an
increased risk of gambling-related harm,
the programme made a successful start.
Through 49 sessions in 2023, we reached
over 800 people in a diverse variety of roles.
We will build on this success over the next
two years of the programme.
Armed Forces Gambling Support Network
Working in partnership with a consortium
of charitable partners led by the Beacon
Counselling Trust, we funded a two-year
pilot scheme across England, Scotland
and Wales which aims to raise awareness
of gambling harms and signpost support
pathways to the armed forces community.
Compared to the general population, it is
estimated that veterans are eight times
more likely to suffer from gambling issues,
while harmful gambling was identified by
the Ministry of Defence as one of its most
significant concerns. This work will aim to
educate the armed forces community
about gambling-related harms, pathways to
treatment and support for those affected.
The armed forces community is a broad
church – covering potential recruits, active
service people, veterans, and families of
service people – so the programme will
offer a myriad of engagement strategies
to generate engagement and drive results
during the two-year pilot.
Our UK safer gambling customer journey
In the UK, our approach continues
to evolve as we prepare for the
implementation of initiatives covered as
part of the UK government’s White Paper
recommendations. We have also continued
to proactively develop our models,
processes, and tools to better identify
and interact with customers and ensure
we provide them with a safe gambling
environment.
We aim to personalise the overarching safer
gambling customer journey for our players,
in which they are scored and segmented
by risk level to ensure our monitoring and
intervention is appropriately tailored to them.
13
ANNUAL REPORT & ACCOUNTS 2023 STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SUPPLEMENTARY INFORMATION
ESG AND SUSTAINABILITY CONTINUED
People
2023 was a transitional year
for colleagues across the
Group. Efforts to integrate
and deliver synergies meant
leaders across the business,
and the People team that
supports them, faced many
of the same challenges
as 2022.
Those challenges can often make it difficult
to create and embed positive change,
particularly through changes in leadership
and periods of uncertainty. Although the
priority for 2023 was guiding the business
through change, in many areas of the
colleague experience significant progress
was made as part of the process of building
the new Company. This progress is expected
to continue at pace through 2024 as we
continue to create great experiences for
our colleagues. For 2023 our focus was on
two key areas: organisational culture, and
leadership and talent.
ORGANISATIONAL CULTURE
The importance of fostering a strong
organisational culture was immediately
clear following the acquisition of William Hill
in 2022. Colleagues across the combined
Group had experienced the strong cultures
and powerful legacies of their previous
organisations. We therefore recognised the
opportunity to build the new, bringing the
best of these experiences and approaches
together. The key priority for the People
team was quickly identified as defining and
embedding a common set of values to drive
engagement in our new organisation.
Creating our values
In partnership with a leading employee
engagement and communications
consultancy, we devised a plan to ensure
our values were created by our colleagues
for our colleagues. The process we followed
gave over 2,000 colleagues the opportunity
to help create our values, ensuring a deep
connection between colleagues and the
business from the beginning.
1. We began with leader workshops, with
65 senior leaders across the business
attending workshops to create a long
list of values they felt were important
today and needed in the future.
2. This long list was shared with all
colleagues in a survey to help us
shortlist what values were most
important, with over 1,600 colleagues
responding with their views.
3. Survey findings were tested with 80
colleagues from across the business to
explore the shortlist and understand
how we talk about values, before an
initial draft was created.
4. 130 colleagues gave feedback on the
values to refine them to a final set and
input to the creative look and feel.
5. The final set was shared with the Group
executive team, which reviewed them
to make sure that the values are what
we need to deliver our strategy and
are linked to our business purpose and
ambition.
6. Finally, 80 senior leaders and members
of our Talent Club took part in testing
to confirm the values and agree the
communications plan to launch across
the business.
Our values
Our values have been created by our people
for our people. They’re not just words on a
page; our values are the essence of who we
are and what we stand for. It’s what we value
at work, it’s how we behave and it’s how we
treat others. Our values are how we play and
how we’ll win.
14
888 HOLDINGS PLC LAUNCHING THE VALUES
On 18 October 2023 we held a global event with a live video link
set up between our sites, which each held local celebrations.
Thousands of colleagues were in attendance to hear about the
values, with the launch supported by a video, game, ambient
media and merchandise.
Measuring success
We recognise that our new values cannot only exist at
launch and must be implemented as part of everyday life
by colleagues across the Group. In order to track the extent
to which this is true we devised a mix of quantitative and
qualitative methods to gather trends, explore sentiment and
understand colleague beliefs.
This is an ongoing process but by year-end we had introduced
a series of questions about the values in our monthly
engagement survey, with the aim of determining:
• Understanding — to what extent colleagues know the
values.
• Belief — to what extent colleagues believe that the values
are right for the Group.
• Action — to what extent colleagues see the values in action
and practise them too.
YEAR–END RESULTS:
Q1. UNDERSTANDING (DEC 23)
eNPS +35
I understand how I can apply the values in my day-to-day work
Q2. BELIEF (DEC 23)
eNPS +20
Our values match my experience of working at the Company
Q3. ACTION (DEC 23)
eNPS +12
People at the company really live our values
We continue to monitor the results of this survey so that
we can advise and adapt our interventions accordingly.
For 2024, embedding the values remains a focus as we
adapt our recognition approach, support for colleagues
developing skills and capabilities, and our approach to
measuring performance.
15
ANNUAL REPORT & ACCOUNTS 2023 STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SUPPLEMENTARY INFORMATION
ESG AND SUSTAINABILITY CONTINUED
People continued
LEADERSHIP ESSENTIALS
WEBINARS
94
webinars attended by 415 colleagues
PROMOTED LEADERS
179
leaders enrolled as mandatory (new
or promoted leader in 2023), 154 (86%)
either completed or in progress at
year end
SATISFACTION RATE
95%
How likely are you to recommend: 94%;
How likely are you to use this
information: 95%
SCORES FOR GROWTH/LEARNING
8.5(v. 7.9) /8.7(v.8.3)
for graduates compared to all People
Leaders
LEADERSHIP DIPLOMA
WORKSHOPS COMPLETED
13
editions of face-to-face four-
day workshops completed by 150
colleagues in 6 locations
IN-HOUSE TRAINING FACILITATORS
14
in-house facilitators to deliver the
training to more colleagues
SATISFACTION RATE
95%
How likely are you to recommend: 97%;
How likely are you to use this knowledge:
94%
ENGAGEMENT
Although defining and embedding a
common set of values was a priority for the
year, we also recognised the importance of
engagement in a broader sense. Employee
engagement, as measured by our eNPS
score, was introduced to our bonus plans to
incentivise leaders across the business to
focus on colleague engagement alongside
performance.
Recognising the challenges expected
through 2023 we set a target of maintaining
our 2022 eNPS score, and we were delighted
to have exceeded this target by year end.
Across 2023 eNPS increased from +8 to +11,
which although a small increase represented
a real success considering the scale of
change that occurred in 2023.
LEADERSHIP AND TALENT
Within the context of a changing
organisation we recognised the importance
of providing a consistent, inspiring and
engaging learning offer for colleagues
across the business. In 2023 we focused
primarily on two key populations: our people
leaders, responsible for guiding colleagues
through change; and those identified as
key talent based on the evaluation of their
performance and potential.
Our in-house specialist teams delivered three
programmes across 2023 that have had a
significant impact: Leadership Essentials,
Leadership Diploma and Talent Club.
• Leadership Essentials is designed to
help new and newly promoted leaders to
be successful in their current and future
roles. It’s practical, and outcome focused.
It’s a global learning and development
programme that provides a fantastic
opportunity for leaders to learn from
fellow leaders across our global business.
• Leadership Diploma is designed for
experienced leaders and is approved by
the Institute of Leadership. It has been
developed in-house and builds on a core
belief that great leadership comes from
awareness, knowledge, and practice. This
programme gives leaders a chance to
connect to the new company values, work
on leadership capabilities and transform
them into improved performance and
engagement.
• Talent Club was created in 2023 to
create a consistent, inspiring, and
engaging learning offer for high-
performing, high-potential colleagues.
This gave participants an opportunity to
connect with other talented individuals,
share skills and knowledge, and discover
opportunity for growth and development.
The programme was supported by
Growth Circle for group coaching
sessions as well as our own executive
team.
– 65 participants in the 2023 edition of
Talent Club (the first).
– Included individual discovery coaching,
9 Q&A sessions with Exec members,
10 monthly group coaching sessions,
10 external masterclasses with Franklin
Covey, Growth Space, Pinnacle, EF
/ Hult, 10 BeTalent 360 feedback
assessments.
– Average overall satisfaction 93%.
COMMUNITY ENGAGEMENT
Our approach to community engagement
evolved this year and we continued to
invest in supporting charities in locations
where the Group operates, both in the form
of financial support as well as through our
volunteering scheme, with all non-retail
colleagues receiving one volunteering day
to use annually to support a charitable
organisation of their choice.
In the UK, we donated over £200,000 to the
charity Support Ukraine funded by profits
from our Eurovision Song Contest betting
markets following the event in Liverpool in
May 2023, with the UK taking on hosting
duties on behalf of Ukraine. In addition, in
partnership with the Betting and Gaming
Council (UK), we joined forces with other
operators in the UK to donate the profits
from the Britannia Stakes race at Royal
Ascot. This saw more than £250,000
donated to several charities in the UK
including SportsAid, the Holocaust Education
Fund, Cystic Fibrosis Trust, SAS Regimental
Association, Ascot Racecourse Supports
and Together for Looked After Children.
Volunteering remains a key focus of our
approach to our communities around the
world, and colleagues are allocated one
day of paid volunteering leave per annum
to support a charity of their choice. In the
UK, colleagues can also be connected to
opportunities within their local communities
through our Neighbourly platform. This year,
the three themes colleagues chose to focus
their volunteering efforts on through the
platform were:
16
888 HOLDINGS PLC In the UK, we partnered with the Retired
Greyhound Trust and Retail colleagues
participated in a number of fundraising
events to support the charity. Teams also
regularly volunteered on dog walking
sessions hosted at the charity’s centres
across the country.
We aim to support organisations all over the
world where we operate and drive colleague
adoption of volunteering opportunities.
1. Looking after the local environment
2. Using sport to make a positive difference
3. Supporting wellbeing
We celebrated these efforts with our first
Company-wide ‘Community Month’, hosted
across all 13 locations in September 2023.
More than 500 colleagues got involved in
the event.
Projects during the event included:
• Colleagues in Krakow helped renovate
an old pasta factory, transforming it into
a community space that serves refugees
and facilitates their smooth transition
into the local community.
• Our teams in Malta organised a full week
of activities including blood donations,
a beach clean-up, and volunteering at a
dog sanctuary.
• Our people in Leeds continued our
ongoing support for local community
team St Chad’s Cricket Club, with two
events helping contribute to the club
renovating their pavilion ahead of the
new season.
17
ANNUAL REPORT & ACCOUNTS 2023 STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SUPPLEMENTARY INFORMATION
ESG AND SUSTAINABILITY CONTINUED
Planet
We fully recognise the
climate crisis and the risk to
the planet and in reaction
set ourselves ambitious
targets to hit net zero
across our Scope 1 and
2 emissions by 2030, and
across our whole value chain
(including Scope 3) by 2035.
We continued to progress
towards our goals in 2023,
with further reductions in
Scope 1 and 2 emissions
achieved. We remain
committed to maintaining
this momentum and driving
ambitious change across the
Group to hit our targets.
In 2023, we undertook a significant re-
baselining exercise, working to consolidate
our data from our legacy 888 and William
Hill locations and suppliers. We onboarded a
new carbon accounting platform, to enable
us to get a clear and consolidated view of
our emissions.
In 2024, we will continue to invest and evolve
this area of focus, engaging colleagues and
changing the way we do things in order to
hit our ambitious targets and play our part
in protecting the future of the planet.
KEY ACHIEVEMENTS IN 2023
• Net zero by 2030: Achieved a 6%
reduction in Scope 1 and 2 (market-
based) emissions from the new 2022
re-baselined data.
• Net zero across value chain by 2035:
Scope 3 emissions increased 33% YOY
following methodological changes to our
reporting methods. These are covered in
more detail in the ESG Supplementary
Information section on pages 176 and 177.
• We continued to be well rated across
the highest-profile ESG ratings, retaining
FTSE4Good membership, achieving a
C on the CDP and a score of 34 on the
CSA.
FOCUS ON...
Managing our energy consumption in retail
through AI
In 2023 we partnered with Optimal
Monitoring to implement their EMMA AI
energy consumption management solution
smart meters in our Retail Licensed Betting
Office (LBO) Estate. EMMA AI is an 'always
on', machine learning energy consumption
management tool.
Following a successful trial over 100 sites
in Q1 2023, EMMA was deployed across all
eligible Retail LBOs in April.
EMMA constantly monitors consumption
inside each LBO and immediately sends
out an email alert to the LBO in the case of
any consumption issues. By instantly and
automatically alerting the LBO, our site
managers are then able to immediately
correct the cause of any consumption
issues. EMMA then receives information back
from the LBO about the issue and applies
its machine learning capability to increase
effectiveness across the entire estate.
In 2023, our energy consumption further
reduced through our use of EMMA AI, by
2,595,852 kWh — a reduction of 5.1% vs our
original consumption forecast for the estate.
TCFD SUMMARY
A high-level summary of our Task Force on
Climate-related Financial Disclosures (TCFD)
is below, with more detailed information
about the climate-related governance,
metrics and targets available in the
dedicated TCFD section found on pages 163
to 175.
Governance
Our climate governance begins with the
Board’s approval of the strategy and targets.
The Group has an established system
of ESG governance which is embedded
throughout the organisation, with the
Board being ultimately accountable for the
implementation and delivery of the transition
plan. The ESG Committee of the Board has
oversight of all ESG matters across the three
pillars of our framework (including Planet)
and the Group’s ESG governance structure is
outlined on page 164 of the TCFD section of
this report.
Our ESG governance structure evolved to
include a Risk and Sustainability Committee,
a monthly executive management
committee which provides oversight to
support the ESG Committee of the Board in
managing risks to 888’s long-term strategic
objectives. The ESG Director leads the ESG
Forum, a cross-functional forum through
which ESG issues can be managed and
escalated to the Risk and Sustainability
Committee as appropriate.
As the ESG Committee of the Board reviews
the implementation of the strategy it will
consider the extent to which additional ESG
metrics and targets should be incorporated
into executive remuneration for 2024.
Initial targets have been included for
FY24 covering the three pillars of the ESG
framework: Players, People, Planet. We will
add further remuneration targets related to
ESG performance in future years.
Strategy
Climate change is a key focus area of our
ESG strategy, and we want to play a role
in ensuring that our planet is preserved
for future generations. In 2021, we set an
ambitious climate goal to reach net zero
greenhouse gas emissions by 2035. For
us, ‘net zero’ means ensuring that the GHG
emissions associated with our business are
reduced to as close to zero as possible,
with residual emissions balanced by quality
carbon removal initiatives, thereby achieving
a ‘net zero’ position. Our data centres, retail
estate, offices, and business travel are the
main sources of our GHG emissions.
18
888 HOLDINGS PLC RISK MANAGEMENT
Climate-related scenario analysis was
conducted for the first time last year to
inform our climate-related strategy and risk
management. The climate-related scenario
analysis considers the risks from transitioning
to a low-carbon economy or transition
risks, and the physical risks resulting from
climate change. Physical risks can be event
driven, such as extreme weather events,
or longer-term shifts in climate patterns.
We continually re-assess and update our
climate risks and closely monitor for new,
emerging risks that may affect the business.
• Scope 3 emissions have variance year on
year due to the use of Environmentally-
Extended Input Output (EEIO) models
for the first time, which estimate energy
use and emissions across supply chains.
We have also changed our classification
system against our procurement and
general ledger categories, which drives
significant improvements in our data
accuracy.
We remain committed to our ambitious net
zero targets and we will use 2023’s figures as
the new baseline for our emission reduction
plans.
The climate-related scenario analysis
demonstrates that the material risks and
opportunities we face from climate change
include both physical and transition risks in
the global markets in which we operate. To
respond to these risks, we will take action
and build resilience by managing the
physical (sites, supply chain) and transition
(market, policy & legal, and reputational)
risks and opportunities in the value chain,
through mitigation and adaptation and
business continuity planning. We will look to
re-review our climate risks in 2024.
Metrics and targets
• Net zero by 2030 across Scope 1 and 2
• Net zero target across our full value
chain by 2035
Our climate metrics and targets are
outlined on page 173. In 2023 our focus
has been on re-baselining our climate
data following the purchase of the William
Hill business. As part of this work we have
onboarded a new data platform called
Normative. Moving to this new platform
has yielded methodological differences in
calculations compared to previous years.
These include:
• Scope 1 emissions remained relatively
constant between 2022 and 2023, with
some minor changes to our fugitive
emissions.
• Scope 2 market-based emissions have
reduced with some of these emissions
now being reclassified under Scope 1.
The percentage of renewable energy
used across the Group remains relatively
consistent.
Overall in 2023 our total emissions were
129,000 tCO2e, up from 98,191 tCO2e in 2022,
a 31% increase year on year. This can be
attributed to the new methodology used to
calculate the Scope 3 emissions compared
with the previous collection method.
We saw our Scope 1 emissions rise from 975
tCO2e to 1,362 tCO2e, primarily due to the re-
categorisation work outlined above.
Our Scope 2 emissions dropped from 2,966
tCO2e to 2,333 tCO2e, again primarily due to
the recalibration exercise.
Scope 3 emissions remain the biggest
challenge for our business as over 97% of
our emissions sit in that category. In 2023
our Scope 3 emissions increased from
94,249 tCO2e to 125,327 tCO2e. The vast
majority of our Scope 3 emissions are in the
purchased goods and services category. In
2024 and beyond we will continue to work
hard with our suppliers to ensure that they
have detailed transition plans in place and
they are also committed to reducing their
emissions.
HOW ARE WE RATED?
We analysed the robustness of our
climate-related strategy, risk management
and performance via the established,
independent global benchmark of the
Carbon Disclosure Project (CDP). In 2023,
we received a CDP score of ‘C’, with work
required across our climate strategy in order
to improve our score.
We retained membership of the FTSE4Good
Series Index, achieving a rating of 3.6/5.
Following the publication of the 2022 Annual
Report, we also received our CSA rating,
showing an 8 point increase year on year
to 34. For 2023, we will receive an S&P
Global ESG Score, and the results will be
incorporated into our strategy for 2024.
19
ANNUAL REPORT & ACCOUNTS 2023 STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SUPPLEMENTARY INFORMATION
ESG AND SUSTAINABILITY CONTINUED
Planet continued
OUR STATEMENT OF ALIGNMENT WITH
THE TCFD REPORTING FRAMEWORK
The table below outlines our alignment with
the TCFD reporting framework for 2023,
and the detailed TCFD Report is on pages
163 to 175:
• Strategy, parts b) & c);
• Risk Management, part c); and
• Metrics and Targets, parts a) & c).
Where our disclosures are not consistent with
TCFD recommendations, the reasons for this
are outlined in the full TCFD Report. A plan is
in place to improve the maturity of our TCFD
reporting in future reporting periods.
OUR ALIGNMENT WITH THE TCFD FRAMEWORK
TCFD
RECOMMENDATION
DISCLOSURE
LEVEL
REFERENCE/FURTHER WORK
GOVERNANCE
Full
Full
Full
STRATEGY
Partial
a. Describe the Board’s oversight of climate-
TCFD Report, pages 163 and 164
related risks and opportunities.
b. Describe management’s role in assessing
and managing climate-related risks and
opportunities.
Governance, page 54
a. Describe the climate-related risks and
TCFD Report, pages 165 to 170
opportunities the organisation has identified
over the short, medium, and long term.
b. Describe the impact of climate-related risks
and opportunities on the organisation’s
businesses, strategy, and financial planning.
Partial
c. Describe the resilience of the organisation’s
strategy, taking into consideration different
climate-related scenarios, including a 2°C or
lower scenario.
Further work is required to integrate the outputs
of the scenario analysis into the business
strategy and financial planning cycles moving
forward and develop metrics to monitor
climate-related risks and potential financial
impacts as required.
TCFD Report, page 170
Further work is required on the consideration
of the potential impact of climate-related
issues on financial performance and position
across different climate scenarios, together with
sensitivity analysis.
Full
a. Describe the organisation’s processes for
identifying and assessing climate-related
risks.
TCFD Report, pages 165 to 167
Risk Management section, page 37
b. Describe the organisation’s processes for
managing climate-related risks.
c. Describe how processes for identifying,
assessing, and managing climate-related
risks are integrated into the organisation’s
overall risk management.
Further work is required to map the climate-
related risks identified by the scenario analysis
to existing principal risks, and to integrate
climate into the organisation’s overall risk
management.
a. Disclose the metrics used by the
TCFD Report, page 173 and 174
organisation to assess climate-related risks
and opportunities in line with its strategy
and risk management process.
We have started to quantify the financial
impact of climate-related risks, but quantified
scenario analysis needs to be conducted.
b. Disclose Scope 1, Scope 2, and, if
TCFD Report, pages 173 and 174
appropriate, Scope 3 greenhouse gas
(GHG) emissions, and the related risks.
c. Describe the targets used by the
organisation to manage climate-related
risks and opportunities and performance
against targets.
Re-baselining has been completed in 2023
and all targets for the business will be focused
around reductions from this data.
RISK MANAGEMENT
Full
Partial
Partial
Full
Partial
METRICS AND
TARGETS
20
888 HOLDINGS PLC
NEXT STEPS IN 2024
We have made significant progress in recent years to change
and improve our business in response to the climate crisis. We
will continue to examine our investments, upgrades and process
changes that will reduce our emissions and help us to hit
our targets.
We have completed a detailed re-baselining exercise that
gives us a strong platform to better understand and manage
our emissions moving forwards, ensuring we hit our ambitious
climate targets.
We will also continue to strive to improve our scores with
external ratings agencies, to check our progress across both
industry peers and other comparable businesses, as we work
towards reducing our environmental impact.
21
ANNUAL REPORT & ACCOUNTS 2023 STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SUPPLEMENTARY INFORMATION
STAKEHOLDER ENGAGEMENT
The Company views stakeholder engagement as an important part
of its ongoing governance arrangements. As a Gibraltar company
the UK Companies Act 2006 does not apply, however we continue
to comply with the requirements of Section 172.
In accordance with the UK Corporate Governance Code 2018, the
Company’s key stakeholders are considered in Board discussions
and decision-making with all Board papers including an explanation
of how the impact to stakeholders has been considered.
WHO ARE OUR STAKEHOLDERS?
WHY?
HOW?
CUSTOMERS
REGULATORS
Our business and livelihoods depend upon our
customers. Building strong relationships with them,
using the expertise of our teams, ensures we gain a
deep understanding of their needs, allowing us to
identify areas of support.
Our competitive customer offering is achieved
by protecting customers, improved product
personalisation and innovation and best-in-class
customer support.
By understanding what our customers think about
our brand, products and services, we can focus
on continuous improvements that align with their
priorities.
The priority for our customers is a superior betting
and gaming experience. This means playing great
products, enjoying quality customer service and
having confidence that they are playing in a safe
and secure environment.
We regularly measure the quality of our service performance
through customer satisfaction, Net Promoter Scores, surveys
and web analytics.
Our customer services teams and retail colleagues are
in contact with our customers daily. We operate multiple
communications channels to generate feedback, to gain
insight and to understand their preferences and needs.
We use data analytics and AI together with our customer
communications channels to promote safer gambling.
More information about our approach to safer gambling can
be found in our Sustainability Report on pages 10 to 13.
Regulators across various territories give the Group
a licence to operate and set the terms for providing
services in their markets. We need absolute clarity on
their regulations to ensure we align with their priorities.
Regulators have an important role in promoting
a safer gaming environment, which benefits all
operators such as 888 that are committed to
responsible models of operation. As such, it is
valuable for the business to maintain regular dialogue
with regulators.
Regulators must be reassured that operators are
using the full scope of their resources to comply with
local market regulations and deliver a safe gaming
environment.
We engage in regular and transparent dialogue with
regulators across our global markets.
We participate in industry events and forums to better
understand the requirements of the regulators wherever we
operate.
We maintain a relationship with the UK Listing Authority,
and meet all the requirements they set out in the UK Listing
Rules, in order to maintain our listing on the London Stock
Exchange.
During FY23 we had extensive dialogue with all of our
regulators, and in particular the Gibraltar Gaming
Commission, around self-identified shortcomings in our
dotcom compliance processes. More details of this are
included in the risk section on page 30.
We recognise that the local communities where we
operate can be our greatest advocates, particularly
when it comes to recruitment.
We have a well-established community involvement
programme. We encourage colleagues to be involved in
community events and participate in local charities.
COMMUNITIES
To maintain a positive relationship, we need to listen
to local issues and understand how we can have a
positive impact.
The communities around our global offices look to the
Company to demonstrate its commitment to the local
area by being a responsible corporate citizen.
Our retail estate depends on the support of our local
communities. We aim to build lasting relationships
within the communities in which we operate, and
our retail colleagues know and understand their
customers.
Colleagues dedicate time sponsored by the Company to
these causes. During 2023 the business held a Group-wide
‘Community Month’ that was focused on encouraging a
greater number of employees to volunteer for local charities
or initiatives. The initiative was a huge success with more
than 500 employees participating, benefitting several local
good causes across all our global offices.
As a Group our economic contribution is significant, including
a total tax contribution of £529m in 2023.
22
888 HOLDINGS PLC WHY?
HOW?
PARTNERS &
SUPPLIERS
We work with partners and/or suppliers in most of
the core functions of our business.
It is imperative we maintain an open dialogue with
our partners and suppliers in order to operate
effectively together and ensure that our interests are
aligned. Our relationships rely on transparency and
cooperation as well as our track record for effective
management and responsible business operations.
We have an open, constructive and effective relationship with
all partners and suppliers through regular meetings which
provide both parties the ability to feedback on successes,
challenges and the future roadmap.
The Group’s whistleblowing hotline is available to suppliers to
allow them to raise any concerns anonymously and all issues
are tracked and monitored.
During 2023 we further developed our supplier risk framework,
including additional risk identification and mitigation
strategies, alongside strengthening controls around
governance and approvals.
SHAREHOLDERS
Understanding the views of our shareholders and
debtholders is critical, and regular and constructive
engagement enables a deeper understanding of
the issues that matter most to them as owners of the
business.
The relationship between the Board and its investors
is based on trust, transparency and the timely
disclosure of information.
We have an open dialogue and regularly meet with our
major shareholders and debtholders to get their views and
feedback. This takes various forms including individual and
group meetings, virtual calls, conferences, and roadshows.
We provide regular investor updates and ensure an ongoing
conversation through the publication of trading updates, half
and full year results, as well as events such as our Annual
General Meeting.
The Board recognises the importance of
demonstrating a high level of openness and
engagement to maintain confidence in our ability
to create value.
Investors seek clear evidence that the Company
has a strategy for value-creation across the short,
medium and long-term.
They demand transparency as the foundation of a
trust-based relationship and expect clarity on the
Board’s approach to maximising opportunities
and managing risks.
The talent, commitment and skill of our colleagues
around the world underpins our ability to deliver our
strategic priorities.
COLLEAGUES
We are proud of our colleagues and want to provide
them with a workplace where they can flourish.
Empowerment, career development, health and
wellbeing and social responsibility are all areas our
colleagues have told us they consider important in
the workplace.
We have an inclusive informal culture, rooted in
respect, care and commitment.
During times of transition and transformation, such
as the leadership changes during 2023, we aim to
support and inform as much as we can. Effective
engagement allows us to identify the most pressing
matters for our colleagues and address them
accordingly.
Market views and shareholder analysis is included as a
standing Board item.
2023 saw extensive shareholder engagement, particularly
around the change in management personnel, the self-
identified compliance shortcomings, and the initiation of
a GBGC licence review prompted by an investment in the
Group by a particular shareholding group. During the year
we held over 400 direct engagements with investors, through
a combination of the Chair, CEO, CFO, CSO and IR Director,
as well as other Board members as required.
Read more on page 50
Our workplaces are informal, open and collaborative,
underpinned by high professional standards.
Our CEO holds regular 'One Company' meetings, and hosts
informal meetings and lunches, all of which are open forum
and attendees have the right to ask questions directly to the
Executive Committee. Regular 'Town Halls' are held by local
management to update on business developments and allow
questions and feedback. All colleagues have the opportunity
to provide feedback through employee engagement surveys,
forums and apps such as Slido. eNPS is measured Group
wide, with a score of +11 at December 2023.
We are committed to proactive, timely and transparent
internal communications with our team on an ongoing
basis. This has been more important than ever during 2023
following leadership changes.
We continue to monitor and develop our approach to
performance management, to promote a culture of
continuous improvement in line with our values.
At the end of the year, we launched our new values, and
employees were invited to a Group-wide global launch where
all our offices were linked via video.
Read more on pages 14 to 17
23
ANNUAL REPORT & ACCOUNTS 2023 STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SUPPLEMENTARY INFORMATION
CHIEF FINANCIAL OFFICER'S REPORT
Improving sustainability and
enhancing long-term profitability
INTRODUCTION
Having joined the Group on 1 February 2024
it was clear that 2023 was a critical year
for the business, with strong delivery against
the previously increased and accelerated
synergy target, as well as fundamental
revenue mix shifts that have improved the
sustainability of the business.
These mix shifts, both in terms of the country
mix towards more regulated markets and
the customer mix in the UK towards lower
spending customers, had a significant
negative impact on the financial results for
2023 and the year-over-year growth rates
observed on a pro forma basis.
The business is now at a critical but exciting
juncture. We must invest in improving
our capabilities in a few critical areas to
successfully drive sustainable, profitable
growth. Our clear plans are outlined in
the CEO report and will be supported by
robust financial governance including highly
disciplined capital allocation. We will ensure
our growth plans support deleveraging and
enable strong shareholder returns in the
coming years.
Outlook
We have a positive outlook for FY24 revenue
with consistent growth in active players
driving confidence in strong revenue growth
online in both the UK&I and International
segments.
At the end of 2023 the Group initiated a
cost savings programme that is expected
to drive approximately £30m of cash
cost savings a year. This will be reinvested
into further strengthening the Group’s
core capabilities in several areas such as
intelligent automation and AI-powered
data and insights, as well as marketing
investment to support revenue growth. These
actions, together with the ongoing strategic
initiatives that support our value creation
plan, are expected to drive improved long-
term sustainable profitable growth.
As part of our value creation plan, we have
outlined new medium-term financial targets
of:
1. Revenue growth of 5-9% per year
2. Adjusted EBITDA margin expansion of
100 basis points per year
3. Leverage of below 3.5x by the end of
2026
SUMMARY
Pro forma results
Given the significance of the acquisition of
William Hill midway through the prior year,
the statutory results do not provide a clear
comparison of performance against the
previous period, as they do not consolidate
the results of the William Hill business for all
the prior period, given the completion date
of 1 July 2022. The pro forma results provide
a clearer performance of the Group in 2023
compared to 2022.
Since the acquisition, the William Hill
business has aligned to the monthly financial
calendar of the Group and, therefore, the
FY22 pro forma financial comparatives cover
the period from 29 December 2021 to
31 December 2022.
On a pro forma basis, including the results
of William Hill in full for both periods and
excluding the 888 bingo business (which was
sold during 2022) for both periods, revenue
of £1,710.9m was down 7.5% (£139.2m)
year-over-year. This was driven primarily
by a proactive revenue mix shift away
from dotcom markets, which impacted
revenues by approximately £80m during
FY23. Revenue was further impacted by
customer mix changes in the UK as a result
of additional safer gambling measures, as
well as a change in the Group’s marketing
approach to focus more on sustainable
revenue and profitability. Together, these
changes have created a higher quality and
more sustainable business mix, including
approximately 95% of FY23 revenue being
generated from regulated and taxed
markets (FY22 revenue 89%).
Our focus on profitability and synergy
delivery aided pro forma Adjusted EBITDA,
with a marginal reduction to £308.3m from
£310.6m despite the significant impact of
our dotcom compliance changes, with
dotcom markets typically being higher
margin. Adjusted EBITDA Margin increased
to 18.0% from 16.8%, reflecting the improved
profitability and focus on higher return
marketing spend which more than offset the
impact of dotcom market changes.
Further segmental details and trends are
discussed within the segmental section later
in this statement.
Synergies
In 2023 the business took decisive actions
enabling it to deliver £150m of cash
synergies in FY23, having accelerated the
timeline for full synergy delivery.
Sean Wilkins
Chief Financial Officer
THE GROUP HAS ALL THE
INGREDIENTS FOR LONG-
TERM SUCCESS AND I
AM EXCITED TO HAVE
JOINED THE BUSINESS AT
THIS CRITICAL JUNCTURE
AND TO BE PART OF THE
LEADERSHIP TEAM TO
DELIVER ON OUR VALUE
CREATION PLAN AND
ACHIEVE THE GROUP’S
CLEAR POTENTIAL.
24
888 HOLDINGS PLC During 2023 the business implemented a
range of operational changes, removing
some duplication to create more efficient
operations and begin delivering the scale
benefits of the combination with William Hill.
The Group also reviewed and adapted its
marketing approach across markets with
a focus on driving more efficient marketing
decisions to support sustainable, profitable
growth.
Following my appointment alongside that
of Per, our new CEO, the business has
reviewed its operating model in line with the
new value creation plan. This process has
identified further opportunities for savings
as the Group delivers on its potential. These
additional savings, along with any further
efficiencies identified, will be reinvested into
driving growth, including through increased
marketing and investment in improving our
core capabilities.
Deleveraging
At 31 December 2023 net debt was £1,716.9m,
representing a £10.8m reduction from 31
December 2022. The reduction in net debt
was primarily driven by favourable foreign
exchange rate movements on the debt
principle, offset by a £47.9m cash outflow
(excluding customer balances) in 2023,
which included £46.0m of exceptional costs
paid out in the period. Leverage at
31 December 2023 was 5.6x, unchanged
from the pro forma leverage at 31 December
2022.
Our disciplined approach to capital
allocation includes reviewing opportunities to
generate cash from lower-return or non-core
assets, and during 2023 the Group realised
approximately £41.8m from non-core
asset sales including the sale of our Latvia
business, and the sale and leaseback of
some freehold properties.
CONSOLIDATED INCOME STATEMENT
Revenue
Revenue for the Group was £1,710.9m for
2023, an increase on a statutory basis of
38.1% compared to 2022, reflecting the
consolidation of William Hill revenues from
H2 2022.
On a pro forma basis, revenue decreased by
7.5% primarily reflecting dotcom compliance
changes and UK online customer mix
changes as noted above.
Revenue from sports betting was £648.8m,
representing a 0.9% decline on a pro forma
basis. Stakes were down 11.3%, offset by
an increase in betting net win margin from
10.8% to 12.1%. Both primarily reflect the
customer mix changes in the UK online
segment to lower-staking, higher-margin,
recreational customers.
RECONCILIATION OF STATUTORY EBITDA TO ADJUSTED EBITDA, ADJUSTED PROFIT
BEFORE TAX AND ADJUSTED PROFIT AFTER TAX
Adjusted Results
Exceptional items
and adjustments
****
Statutory Results
2023
£’m
1,710.9
(572.6)
1,138.3
(237.6)
(593.8)
1.4
308.3
(114.0)
194.3
(173.7)
20.6
27.5
48.1
10.7
2022
£’m
1,238.8
(444.4)
794.4
(257.8)
(319.0)
0.3
217.9
(63.6)
154.3
(73.8)
80.5
(16.3)
64.2
15.1
2023
£’m
0.0
2.6
2.6
0.0
(49.6)
0.0
(47.0)
(114.3)
(161.3)
19.4
(141.9)
37.4
2022
£’m
0.0
3.9
3.9
0.0
(106.3)
0.0
(102.4)
(56.7)
(159.1)
(37.1)
(196.2)
11.4
2023
£’m
1,710.9
(570.0)
1,140.9
(237.6)
(643.4)
1.4
261.3
(228.3)
33.0
(154.3)
(121.3)
64.9
2022
£’m
1,238.8
(440.5)
798.3
(257.8)
(425.3)
0.3
115.5
(120.3)
(4.8)
(110.9)
(115.7)
(4.9)
(104.5)
(184.8)
(56.4)
(120.6)
(12.6)
(28.3)
Revenue
Cost of sales
Gross profit
Marketing Expenses
Operating Expenses**
Share of post-tax profit of equity
accounted associate
EBITDA*
Depreciation and amortisation***
Profit before interest and tax
Finance income and expenses
(Loss)/Profit before tax
Taxation
(Loss)/Profit after tax
Basic earnings per share
*
EBITDA is defined as earnings before interest, tax, depreciation and amortisation.
** Statutory Operating expenses of £643.4m includes Operating expenses of £590.8m (being the Operating expenses
of £819.1m less Depreciation and amortisation of £228.3m) and Exceptional items – operating expenses of £52.6m
per the Consolidated Income Statement.
*** Statutory Depreciation and amortisation of £228.3m has been separated from Operating expenses of £819.1m per
the Consolidated Income Statement.
**** Foreign exchange within adjustments of £2.6m gain within Cost of sales, £1.6m expense within Operating expenses
and £36.6m gain within Finance income and expenses.
Adjusted EBITDA is defined as EBITDA excluding share-based payment charges, foreign exchange losses and
exceptional items and other defined adjustments. Foreign exchange losses and share benefit charges were
excluded to allow for further understanding of the underlying financial performance of the Group. Further detail on
exceptional items and adjusted measures is provided in note 3 to financial statements.
In the reporting of financial information, the Directors use various APMs. These APMs should be considered in
addition to, and are not intended to be a substitute for, IFRS measurements. As they are not defined by International
Financial Reporting Standards, they may not be directly comparable with other companies’ APMs. The Directors
believe these APMs provide additional useful information for understanding performance of the Group. They are
used to enhance the comparability of information between reporting periods and are used by management for
performance analysis and planning. An explanation of our adjusted results to the statutory results is provided in
note 3 to the financial statements.
Revenue
Adjusted Cost of sales
Gross profit
Marketing expense
Adjusted operating expenses
Share of post-tax profit of equity
accounted associate
Adjusted EBITDA
Pro forma (Unaudited)
2023
£’m
1,710.9
(572.6)
1,138.3
(237.6)
(593.8)
1.4
308.3
2022
£’m
1,850.1
(599.2)
1,250.9
(331.8)
(608.7)
0.2
310.6
Change
(7.5)%
(9.0)%
(0.7)%
25
ANNUAL REPORT & ACCOUNTS 2023
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SUPPLEMENTARY INFORMATION
CHIEF FINANCIAL OFFICER'S REPORT CONTINUED
CONSOLIDATED INCOME STATEMENT
CONTINUED
Revenue continued
Gaming revenue of £1,062.1m was down 11.2%
year-over-year, predominantly driven by
the factors mentioned above, with dotcom
markets more heavily weighted towards
gaming.
Cost of sales
Cost of sales mainly comprise gaming taxes
and levies, royalties payable to third parties,
chargebacks, payment service provider
('PSP') commissions and costs related to
operational risk management and customer
due diligence services. Cost of sales
increased on a statutory basis to £570.0m
from £440.5m due to the acquisition of
William Hill in H2 2022. On a pro forma basis,
cost of sales decreased by 4.4% to £572.6m
principally reflecting the reduction in revenue,
with cost of sales representing 33.5% of
revenues (2022: 32.4%). The slight increase
in cost of sales as a percentage of revenue
primarily reflects the change in country mix,
with a higher proportion of locally regulated
and taxed revenues in 2023.
Gross profit
On a statutory basis, gross profit increased
to £1,138.3m from £794.4m with the
consolidation of the results of William Hill
from H2 2022.
On a pro forma basis, gross profit decreased
by 9.0% from £1,250.9m to £1,138.3m,
alongside a decrease in the gross margin
from 67.6% to 66.5% with more revenue
generated from regulated and taxed
markets as described above.
Marketing expenses
Marketing is a significant investment for our
Group to drive growth through investing in
our leading brands, as well as customer
acquisition and retention activities. On
a statutory basis marketing decreased
by 7.8% from £257.8m in 2022 to £237.6m
driven by marketing synergies, as well as
increased focus on higher-return marketing
investments. This represents a marketing
to revenue ratio (marketing ratio) of 13.9%
(2022: 20.8%), with the reduction being
driven by both lower marketing and the
inclusion of a full year of Retail results, where
the marketing ratio is significantly lower.
On a pro forma basis, marketing expenses
decreased by 28.4% from £331.8m to
£237.6m. Certain marketing is demand
driven and flexible, so part of the reduction
is as a result of the reduced online revenue
noted above.
26
Further marketing savings were also
achieved following the acquisition of William
Hill and the development of a refined brand
marketing strategy to focus on driving
sustainable profitable growth with improved
marketing efficiency. The marketing ratio
decreased from 17.9% in 2022 to 13.9% in
2023. This partly reflects the mix of revenue
with more generated from the Retail
business where the marketing investment
is significantly lower. Excluding the Retail
segment, the online marketing ratio
decreased from 24.4% to 19.7% reflecting
the refined brand marketing strategy and
improved marketing efficiency.
Operating expenses
Operating expenses mainly comprise
employment costs, property costs,
technology services and maintenance, and
legal and professional fees. On a statutory
level, operating expenses increased to
£643.4m from £425.3m in 2022. This increase
is due to the acquisition of William Hill with
the Retail business having a much higher
proportion of operating expenses to revenue
given the employment and property costs
required to operate.
On a pro forma basis, adjusted operating
expenses excluding depreciation and
amortisation decreased by 2.4% from
£608.7m in 2022 to £593.8m in 2023.
The reduction in overheads reflects the
successful delivery of synergies and focus on
cost control more than offsetting underlying
inflation challenges across the business,
particularly within the Retail estate.
EBITDA & Adjusted EBITDA
Reported EBITDA increased by 126.2% from
£115.5m to £261.3m. On an adjusted basis, the
increase was 41.5% to £308.3m from £217.9m,
with an Adjusted EBITDA margin of 18.0%
compared to 17.6% in 2022.
On a pro forma basis, Adjusted EBITDA
decreased marginally to £308.3m in 2023
compared to £310.6m in 2022. The Adjusted
EBITDA Margin increased to 18.0% in 2023
from 16.8% in 2022 driven by the successful
delivery of synergies and focus on cost
efficiency more than offsetting the impact
of compliance and regulation headwinds
noted above.
Finance Income and Expenses
Net finance expenses of £154.3m (2022:
£110.9m) related predominantly to the
interest from the debt on acquisition of
William Hill of £139.4m (2022: £97.7m), which
is net of foreign exchange.
The finance expense resulting from leases
was £6.9m (2022: £3.0m) with the increase
due to the inclusion of a full year of results
from the acquired Retail business within
William Hill, which operates primarily from
leasehold sites.
The finance expense from hedging activities
was £12.1m (2022: £3.3m), predominantly due
to foreign exchange movements.
(Loss)/profit before tax
The net loss before tax for 2023 was £121.3m
(2022: net loss before tax of £115.7m). On an
adjusted basis, profits decreased by 74.4%
to a profit of £20.6m (2022: net profit before
tax of £80.5m), with the increased financing
costs from the debt on acquisition of William
Hill offsetting the increased earnings from
the enlarged Group.
Taxation
On a statutory basis, the Group recognised
a tax credit of £64.9m on a loss before tax
of £121.3m, giving an effective tax rate of
53.5% (2022: tax charge of £4.9m and an
effective tax rate of 4.2%). The tax credit
and therefore the tax rate is higher than
the expected tax credit arising on the
loss of 23.5% primarily due to operating in
territories with lower effective tax rates such
as Gibraltar, Spain and Malta, additional
prior year tax credits from filing submissions
in Gibraltar and from the recognition of a
previously unrecognised deferred tax asset
relating to the Group’s intangible assets.
These benefits have been offset by the
reduced availability of tax relief arising on
costs incurred in the period.
On an adjusted basis, the Group recognised
a tax credit of £27.5m on a loss before tax
of £20.6m, giving an effective tax rate of
133.5% (2022: tax charge of £16.3m and an
effective tax rate of 20.2%). This higher rate
reflects the mix of profits and losses before
tax across the Group giving rise to a lower
consolidated base on which the rate is
calculated.
Net (loss)/profit and adjusted net profit
The net loss for 2023 was £56.4m (2022: net
loss of £120.6m). On an adjusted basis, profit
decreased by 25.1% to £48.1m from £64.2m in
2022, reflecting the items discussed above.
Earnings per share
Basic loss per share reduced to 12.6p (2022:
loss of 28.3p) because of the full year
consolidation of William Hill in 2023.
On an adjusted basis, basic earnings
per share decreased by 29.1% to 10.7p
(2022: 15.1p). Further information on the
reconciliation of earnings per share is given
in note 10.
Dividends
The Board of Directors is not recommending
a dividend to be paid in respect of the year
ended 31 December 2023 (2022: nil per
share). The Board’s decision is to suspend
payments of dividends until leverage is at or
below 3x, as previously announced following
the acquisition of William Hill.
888 HOLDINGS PLC INCOME STATEMENT BY SEGMENT
The below tables show the Group’s performance by segment on a reported and pro forma
basis respectively:
Revenue
Adjusted EBITDA
Statutory
Change
from
previous
year
% of
reported
Revenue
(2023)
2023
£’m
535.0
658.5
1,193.5
517.4
0.0
0.0
Retail
UK&I Online
Total UK & I
International
Other
Corporate
2022
£’m
255.5
455.5
109.4%
44.6%
711.0
508.3
67.9%
1.8%
19.5 (100.0%)
–
0.0
31.3%
38.5%
69.8%
30.2%
0.0%
0.0%
Change
from
previous
year
% of
Adjusted
EBITDA
(2023)
2023
£’m
98.9
152.3
251.2
99.4
0.0
(42.3)
2022
£’m
41.2
61.6
140.0%
147.2%
102.8
118.3
144.4%
(16.0%)
1.7 (100.0%)
763.3%
(4.9)
32.1%
49.4%
81.5%
32.2%
0.0%
(13.7%)
Total
1,710.9
1,238.8
38.1% 100.0% 308.3
217.9
41.5% 100.0%
Pro forma
Revenue
Adjusted EBITDA
2023
£’m
535.0
658.5
1,193.5
517.4
0.0
2022
£’m
519.0
717.4
1,236.3
613.7
0.0
Retail
UK&I Online
Total UK & I
International
Corporate
Change
from
previous
year
% of
reported
Revenue
(2023)
3.1%
(8.2%)
(3.5%)
(15.7%)
–
31.3%
38.5%
69.8%
30.2%
0%
Change
from
previous
year
% of
Adjusted
EBITDA
(2023)
9.0%
36.1%
24.0%
(26.9%)
50.5%
32.1%
49.4%
81.5%
32.2%
(13.7%)
2023
£’m
98.9
152.3
251.2
99.4
(42.3)
2022
£’m
90.7
111.9
202.6
136.0
(28.1)
Total
1,710.9
1,850.1
(7.5%)
100.0% 308.3
310.6
(0.7%)
100.0%
For the commentary on divisional performance below, the pro forma financials give a clearer comparative of
performance compared to the previous period. Furthermore, it reflects adjusted results, since that is the basis on which
these are reported internally and in our segmental analysis. An explanation of our adjusted results to the statutory results
is provided above and in note 3 to the financial statements.
UK & IRELAND (UK&I)
UK&I Online
On a statutory basis, revenue increased
by 44.6% to £658.5m and Adjusted EBITDA
increased by £90.7m compared to the
previous period, driven by the acquisition of
William Hill.
On a pro forma basis, revenue declined by
8.2% to £658.5m reflecting the impact of our
business mix shifting towards lower-spending
customers, with average revenue per
customer down 18%, which more than offset
strong growth in average monthly actives of
11%. This mix shift was driven by a range of
proactive compliance measures adopted
ahead of the upcoming regulatory change
in the UK, including, among other items,
significantly lowering thresholds for financial
checks, increasing the level of customer
interactions and interventions, and lowering
stake limits on online slots.
Alongside the more proactive compliance
measures and approach, revenue was
impacted by the change in marketing
approach to focus on higher-return
marketing and customer retention, rather
than acquisition. This has been particularly
prevalent in the 888 brands in the UK which
had historically invested significantly in
customer acquisition given its subscale
market position, particularly in sports. With
the range of brands and assets the Group
now has in the UK it can be much more
effective with its marketing investment,
which has improved profitability but reduced
revenue in the short term.
Pro forma adjusted EBITDA increased by
£40.4m (36.1%) with the Adjusted EBITDA
margin improving by 7.5 percentage points
to 23.1% as a result of optimised marketing
and delivery of synergies.
Retail
On a statutory basis, Retail generated
revenue of £535.0m and Adjusted EBITDA
of £98.9m as the Retail business continued
to deliver robust financial performance and
strong cash generation.
On a pro forma basis, revenue increased
by 3.1% to £535.0m in 2023 despite a 3%
reduction in the number of shops. This
was driven by continued strong customer
engagement, and a slightly higher
sportsbook net win margin year over year,
particularly at some of the bigger racing
festivals. During the year the Group replaced
and upgraded approximately 2,000 self-
service betting terminals (SSBTs) and added
an additional 1,000 SSBTs across the estate,
contributing to an improved product offering
which supported revenue growth.
Pro forma Adjusted EBITDA increased by
£8.2m to £98.9m in 2023 driven by the
revenue growth, with high operating leverage
within Retail, as well as excellent cost control
including our refined staffing model.
There were 1,343 shops open at the end of
2023 compared to 1,386 at the end of 2022.
The small reduction to the already well-
optimised estate largely reflects the impact
of inflationary cost increases making certain
shops no longer commercially viable.
INTERNATIONAL
On a statutory basis, International revenue
increased by 1.8% to £517.4m and Adjusted
EBITDA decreased by £18.9m compared to
the previous period. The revenue increase
was driven by the acquisition of William Hill,
with the dotcom compliance changes more
than offsetting this impact at an Adjusted
EBITDA level.
On a pro forma basis revenue declined by
15.7% to £517.4m, as double-digit growth in
our core markets of Italy and Spain was
more than offset by a significant reduction in
revenue from our dotcom markets. This was
a result of our regulatory and compliance
changes, principally the suspension of VIP
customer accounts in the Middle East, as
the business did not recover as expected
following the initial suspension.
Pro forma adjusted EBITDA declined by
£36.6m to £99.4m with the Adjusted EBITDA
margin declining by 3.0 percentage points to
19.2%, primarily reflecting the loss of revenue
from dotcom markets, where margins are
typically much higher.
CORPORATE COSTS
On a statutory basis, corporate costs were
£42.3m in 2023 compared to £4.9m in 2022.
This is due to the timing of the release of
staff incentive accruals in the prior year
across the Group including those accrued
prior to acquisition within William Hill.
On a pro forma basis, there was an increase
in corporate costs of £14.2m to £42.3m due
to capitalisation rate alignments across the
Group, as well as reallocation of overheads
across segments.
27
ANNUAL REPORT & ACCOUNTS 2023 STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SUPPLEMENTARY INFORMATION
CHIEF FINANCIAL OFFICER'S REPORT CONTINUED
CONSOLIDATED STATEMENT OF
FINANCIAL POSITION
Non-current assets decreased by £169.9m
to £2,298.5m compared to £2,468.4m at
2022, predominantly due to amortisation of
Goodwill and Other intangible assets which
have decreased by £170.0m. Deferred tax
assets have increased by £31.8m to £37.0m
compared to £5.2m in 2022, due to the
recognition of a previously unrecognised
deferred tax asset related to the Group’s
intangible assets.
Current assets are £449.1m, a decrease
of £45.3m compared to £494.4m at 2022.
Within this, cash and cash equivalents
decreased by £61.4m to £256.2m from
£317.6m, which includes £127.8m of customer
deposits compared to £141.3m at 2022.
Excluding client funds, cash and cash
equivalents decreased by £47.9m from
£176.3m in 2022 to £128.4m in 2023.
Current liabilities decreased by £49.3m from
£703.4m at FY22 to £654.1m at FY23. This
includes the reduction in client funds held,
offset by an increase in trade and other
payables. Provisions decreased by £33.0m
to £78.5m primarily due to the payment of
the regulatory settlement with the UKGC.
Furthermore, there are provisions of £62.8m
for gaming tax in Austria.
Non-current liabilities were £2,013.6m, a
decrease of £86.6m from the balance
of £2,100.2m at 2022. This reduction is
predominantly due to the movement in
borrowing driven by foreign exchange
translations. In addition, the deferred
tax liability decreased by £59.1m, mainly
driven by the unwind of deferred tax on the
acquisition accounting. Lease liabilities have
remained broadly in line with prior year.
Additionally, provisions for customer claims
of £104.7m, £98.8m relating to William Hill
and Mr Green brands and £5.9m relating to
888, are currently recognised as non-current
liabilities.
Net assets of £79.9m was a decrease of
£79.3m compared to £159.2m at 2022.
EXCEPTIONAL ITEMS AND ADJUSTMENTS
Operating Exceptional items
Retroactive duties and associated charges
Integration and transformation costs
Corporate transaction-related costs
Regulatory provisions and associated costs
Disposal of 888 Bingo
Impairment of US Goodwill and other assets
Revaluation of Contingent consideration
Total exceptional items before interest and tax
Bond early redemption fees
Gain on settlement of bonds
Total exceptional items before tax
Tax on exceptional items
Total exceptional items
Adjustments:
Fair value gain on financial assets
Amortisation of Finance Fees
Amortisation of acquired intangibles
Foreign exchange
Share benefit (credit)/charge
Total Adjustments before tax
Tax on adjustments
Total Adjustments
Total exceptional items and adjustments
EXCEPTIONAL ITEMS AND ADJUSTMENTS
Operating exceptional items in the year
totalled £43.6m in 2023 compared to
£103.0m in 2022.
Exceptional items are defined as those items
which are considered one-off or material
in size or nature to be brought to attention
to better understand the Group’s financial
performance. Refer to note 3 to the financial
statements for further detail.
There were £49.3m of costs incurred
relating to the ongoing integration and
transformation of the William Hill business in
order to achieve synergies. The cash costs
to achieve the targeted integration synergies
and the global cost saving programme have
therefore now increased to approximately
£115m, incurred through to 2025, with the
majority incurred in 2023 or expected to be
incurred in 2024. This includes the global
cost saving programme of £30m, initiated
in December 2023, as well as the original
£150m synergy programme.
Corporate transaction-related costs relate
predominantly to the disposal of the Latvia
and Colombia businesses, with prior year
costs related to the acquisition of William Hill.
28
2023
£’m
—
49.3
(0.1)
3.4
—
—
—
52.6
—
—
52.6
(9.0)
43.6
(4.1)
17.2
114.3
(37.6)
(0.5)
89.3
(28.4)
60.9
104.5
2022
£’m
(3.9)
14.4
24.5
—
11.7
55.7
(9.2)
93.2
14.1
(7.1)
100.2
2.8
103.0
—
7.4
56.7
26.7
5.2
96.0
(14.2)
81.8
184.8
The Group paid £2.9m during the period
related to a regulatory settlement with
the Gibraltar regulator in relation to the
previously disclosed failings that we
identified in our Middle East business. Further
to this there were £0.5m of professional fees
incurred relating to this settlement.
Adjustments reflect items that are recurring,
but which are excluded from internal
measures of underlying performance to
provide clear visibility of the underlying
performance across the Group, principally
due to their non-cash accounting nature.
They are items that are therefore excluded
from Adjusted EBITDA, Adjusted PAT and
Adjusted EPS.
The amortisation of the specific intangible
assets recognised on acquisitions has been
presented as an adjusted item, totalling
£114.3m relating to the William Hill acquisition.
This amortisation is a recurring item that will
be recognised over its useful life.
The other items that have been presented
as adjusted items are fair value gain on
financial assets of £4.1m, foreign exchange
gains of £37.6m (foreign exchange loss of
£26.7m in 2022), amortisation of finance fees
of £17.2m (£7.4m in 2022), and share based
payment (credit)/charges of £(0.5)m (£5.2m
in 2022).
888 HOLDINGS PLC CASH FLOWS
Cash generated from operating activities before
working capital
Working capital movements
Net cash generated from/(used in) operating activities
Acquisitions
Disposals
Capital expenditure
Net movement in borrowings incl loan transaction fees
Proceeds from equity placing
Net interest paid
Settlement of derivatives
Other movements in cash incl FX
Net cash (outflow)/inflow
2023
£’m
233.3
(81.9)
151.4
0.0
41.8
(68.4)
(35.8)
0.0
(138.1)
(10.8)
(1.5)
(61.4)
256.2
2022
£’m
139.6
(169.8)
(30.2)
(386.8)
33.0
(76.8)
527.6
158.5
(75.6)
—
(21.5)
128.2
317.6
Cash balance
Gross Debt
Net Debt
CASH FLOWS
Overall, the Group had a cash outflow of
£61.4m in the year, compared to an inflow
of £128.2m in 2022. This resulted in a cash
balance of £256.2m as at 31 December 2023
(£317.6m at 31 December 2022), although
this included customer deposits and
other restricted cash of £127.8m such that
unrestricted cash available to the Group was
£128.4m compared to £176.3m in 2022.
Cash flow from operations was a £151.4m
inflow compared to an outflow of £30.2m in
2022. This increase was partly due to a full
year of EBITDA from the enlarged business
in 2023, as well as lower working capital
outflows.
Disposals of £41.8m represented the
proceeds on the sale of non-core assets
including the Latvia business and the sale
and leaseback of certain freeholds.
Capital expenditure was £68.4m in 2023, a
reduction from £76.8m reflecting synergies
and ongoing cost control.
NET DEBT
Borrowings
Loan transaction fees
Gross Borrowings
Lease liability
Cash (excluding customer balances)
Net Debt
LTM pro forma Adjusted EBITDA
Leverage
(1,757.7)
(1,716.9)
(1,815.0)
(1,727.7)
Payment of lease liabilities represented
£31.8m of lease liability payments in the
period, with the increase over the prior
year driven by the acquisition of William
Hill and its associated retail estate, as well
as from the sale and leaseback of freehold
properties in the year.
Included within net movement in borrowings
were £4.0m of principal payments, relating
to the 1% annual amortisation on the US$
Term Loan B.
Net interest paid of £138.1m predominantly
related to the borrowings undertaken.
Settlement of derivatives of £10.8m paid in
the year related to hedging instruments.
Other movements included £4.3m further
investment in 888AFRICA, as well as dividend
income received from associates of £5.9m.
31 December
2023
£’m
31 December
2022
£’m
(1,661.1)
(96.6)
(1,757.7)
(87.6)
128.4
(1,716.9)
308.3
5.6x
(1,702.3)
(112.7)
(1,815.0)
(89.0)
176.3
(1,727.7)
310.6
5.6x
NET DEBT
The gross borrowings balance as at 31
December 2023 was £1,757.7m. The earliest
maturity of this debt is in 2026, which is
£11m, with most of the debt maturing across
2027 and 2028. In addition to this, the Group
has access to a £150m Revolving Credit
Facility maturing in January 2028, which was
undrawn at 31 December 2023, consistent
with 31 December 2022.
The debt is across GBP sterling, Euro and
US Dollar; with 49% of the debt in Euro;
43% in GBP and 8% in USD. The Group has
undertaken hedging activities such that 70%
of the interest is at fixed rates and 30% at
floating rates with the hedging relationships
in place for three years to 2025. The Group
continues to assess all opportunities to
optimise its debt capital structure and
manage its debt facilities.
The net debt balance at 31 December 2023
was £1,716.9m with a net debt to EBITDA
ratio of 5.6x. This compares to £1,727.7m and
5.6x respectively as at 31 December 2022.
The reduction in net debt is predominantly
due to foreign exchange movements on
the USD and EUR denominated debt
principal amounts, together with lower loan
transaction fees. This is partly offset by lower
closing cash position following outflow of
cash detailed above.
SEAN WILKINS
Chief Financial Officer
26 March 2024
29
ANNUAL REPORT & ACCOUNTS 2023 STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SUPPLEMENTARY INFORMATION
RISK MANAGEMENT
INTRODUCTION
The culture of compliance remains at the
heart of our activities and drives continuous
improvement in risk management across the
business.
2023 has been a transformative year in
developing and embedding our Enterprise
Risk Management Framework across the
organisation whilst actively addressing and
remediating historical deficiencies.
Our top priority is to ensure the long-term
sustainability and success of the business,
and effective risk management plays a
critical role in achieving this goal.
During 2023 we substantially improved the
risk profile of the Group, underscoring our
steadfast commitment to strengthening
our control environment. Through strategic
initiatives and enhanced governance
measures, we have significantly enhanced
our resilience to emerging risks while
fostering a culture of accountability
and transparency.
KEY DEVELOPMENTS IN 2023
• Conclusion of historical GBGC issues:
During the year, the Group reached a
regulatory settlement with the Great
Britain Gambling Commission (GBGC)
relating to social responsibility and anti-
money laundering failings at William Hill
which occurred in 2020 and 2021. Whilst
the failings occurred under previous
ownership and management, we took
the findings incredibly seriously, working
collaboratively with the GBGC on several
initiatives which will have a long-term,
positive impact. As part of the settlement
we agreed two licence conditions, both
of which were fulfilled by the February
2024 deadline. This included the
external audit of policies, procedures,
and controls by an independent third
party which concluded that there is
a comprehensive and mature control
framework across all entities. No high
priority recommendations were raised.
Feedback is expected imminently from
the GBGC, and we are highly confident
that this will be positive following the
significant strengthening of our control
environment.
• Enhanced compliance structure driving
higher standards: In January 2023 we
self-identified and self-reported issues
related to certain shortcomings in our
compliance processes related to VIP
accounts in the Middle East. Following
this, we engaged proactively with the
Gibraltar Gaming Commission in relation
to this issue and reached a regulatory
settlement during the year, with the
Gibraltar regulator being complimentary
about the proactive, swift, and robust
remedial actions we took, as well as the
enhanced policies and procedures that
are now in place. The identification of this
issue and ensuing actions we took reflect
the proper functioning of the Group’s
enhanced compliance culture and serve
as a good example of what a proactive
approach to risk management looks like.
• Board Risk Appetite Statement: In 2023
we redefined our Board Risk Appetite
Statement, which plays a vital role in
promoting a risk-aware culture within the
organisation, enhancing decision-making
processes, and ultimately contributing to
the achievement of strategic objectives.
• Strengthened risk governance and
management oversight: Established
robust committee structures, ensuring
effective execution of mandates
and comprehensive oversight of
risk management activities, while
implementing clear escalation
mechanisms for timely identification
and response to both risk threats and
opportunities.
• Improved risk accountability: Established
clear roles and responsibilities, fostering
a culture of engagement, accountability,
and proactive risk management across
every business unit.
• Embedding risk incident management:
Developed a centralised procedure
for providing robust oversight of risk
incidents arising throughout the course
of the year, ensuring swift and effective
resolution while promoting organisational
learning and continuous improvement in
risk management practices.
KEY PRIORITIES FOR 2024
• Cultivating a strong risk culture: Ensuring
risk management is understood and
prioritised by every employee as the
business continues to promote a culture
of risk awareness, accountability, and
engagement, through targeted training,
communication, and recognition
programme.
Harinder Gill
Chief Risk and Intelligent Automation
Officer
OUR TOP PRIORITY IS
TO ENSURE THE LONG-
TERM SUSTAINABILITY
AND SUCCESS OF THE
BUSINESS, AND EFFECTIVE
RISK MANAGEMENT PLAYS
A CRITICAL ROLE IN
ACHIEVING THIS GOAL.
30
888 HOLDINGS PLC • Advance risk technology and analytics:
Invest in cutting-edge risk management
technologies and advanced data
analytics techniques, including artificial
intelligence, machine learning and
predictive analytics to derive actionable
insights, enabling informed decision-
making and proactive risk management
strategies.
• Promote innovation in risk management:
Encourage innovation in risk
management practices, including
the adoption of agile methodologies
and novel solutions to complex risk
challenges, ensuring resilience and
competitiveness,
• Stay abreast of regulatory change:
Monitor and adapt to evolving regulatory
requirements and industry standards,
actively participating in consultations
where possible, to drive optimal outcomes
for our business and customers.
• Continuous improvements: Regularly
evaluate the effectiveness of risk
management strategies, frameworks, and
processes, leveraging lessons learned
to drive continuous improvement and
resilience in the face of evolving threats
and uncertainties.
RISK GOVERNANCE
The risk management governance
framework is in place to oversee and
manage all business activities and
includes specific roles, responsibilities, and
decision-making processes. It supports
the Company’s risk management strategy
and assists the effective implementation,
and effective and efficient alignment of the
risk strategy with overall Company goals
and objectives. Our three lines of defence
model consists of three distinct lines of
responsibility and provides a clear and
transparent risk management and reporting
framework to support the Board in its
oversight responsibilities.
An overview of the Group's risk management
governance structure along with key
responsibilities is outlined opposite.
ENTERPRISE RISK MANAGEMENT FRAMEWORK
Establishing an infrastructure that manages the Company’s overall risk exposure, generates
competitive advantages, and creates business opportunities.
R i s k Governance
RISK
REPORTING
RISK
STRATEGY
RISK
MONITORING
RISK
CULTURE
INCIDENT
MANAGEMENT
RISK
MANAGEMENT
BUSINESS
CONTINUITY
AND RESILIENCE
Risk Identifi cation; Assess m e n t ;
p
s
R e
e
s
n
o
BOARD AUDIT & RISK COMMITTEE
BOARD ESG COMMITTEE
The Board Audit & Risk Committee sets
the Risk Appetite, aligned with strategic
objectives; oversees the effectiveness
of the risk management framework;
and ensures compliance with policies
and procedures.
The Board ESG Committee provides
Board-level oversight of 888’s ESG
strategy, targets and progress against
key performance indicators.
EXECUTIVE RISK AND
SUSTAINABILITY COMMITTEE
EXECUTIVE
COMMITTEE
The Executive Risk and Sustainability Committee provides executive oversight over
the implementation and execution of the risk management framework to support the
Board in managing principal and emerging risks to its long-term strategic objectives,
including its impact on its sustainability strategy. It provides comprehensive analysis
and recommendations to the Executive Committee assisting it in making informed
decisions, contributing to the overall success and sustainability of the organisation.
DIVISIONAL COMMITTEES AND FORUMS
FINANCIAL CRIME
COMPLIANCE
DATA PROTECTION
ESG
Committees and Forums have delegated authority from the Executive Risk and
Sustainability Committee to support the Group Chief Risk Officer in exercising specific
and topical risk management responsibilities, playing a crucial role in promoting a
culture of risk awareness, compliance and accountability.
31
ANNUAL REPORT & ACCOUNTS 2023 STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SUPPLEMENTARY INFORMATION
RISK MANAGEMENT CONTINUED
RISK ACCOUNTABILITY
RISK STRATEGY
In 2023, we implemented an enhanced
accountability structure across each of our
business units and supporting functions.
With the introduction of key roles including
Accountable Executives, Risk Champions,
and Accountable Business Risk Partners, we
are reinforcing our commitment to proactive
risk management and governance.
These appointed individuals will play pivotal
roles in driving risk awareness, fostering
a culture of accountability and ensuring
effective risk response strategies are in place
within their respective business units. Their
expertise and dedication will strengthen
our overall risk framework, enabling us
to navigate challenges with confidence
and uphold our commitment to delivering
sustainable value to our stakeholders.
Our risk strategy takes a holistic approach
to risk management that not only addresses
potential threats but also embraces
opportunities for growth and innovation. Our
risk strategy is geared towards identifying,
assessing, and optimising both risks and
opportunities, enabling us to navigate
uncertainties while driving sustainable value
creation for our stakeholders. It involves:
• Comprehensive risk assessment: We
conduct thorough assessments to identify
and evaluate potential risks that could
impact our business operations, financial
performance, and reputation.
• Opportunity-centric approach: Our risk
strategy incorporates an opportunity-
centric mindset, where we actively seek
out and capitalise on opportunities for
strategic growth and differentiation.
We leverage market trends, customer
insights, and emerging technologies to
identify and pursue opportunities that
align with our business objectives.
• Risk-informed decision making: We
integrate risk considerations into our
decision-making processes, balancing
the potential risks and rewards
associated with various initiatives and
investments. This enables us to make
informed decisions that optimise risk-
adjusted returns and maximise value
creation while managing potential
downside risks.
• Operational resilience and business
continuity: We prioritise operational
resilience and business continuity,
implementing robust plans and measures
to ensure the continued delivery of
critical services and functions during
disruptive events.
• Horizon scanning and emerging risks:
We conduct horizon scanning exercises
to identify emerging trends, technologies,
regulatory changes, and market
dynamics that could pose risks or create
opportunities for our organisation.
• Staff well-being and engagement: We
prioritise the wellbeing and engagement
of our staff, investing in training,
development, and support programmes
to empower our staff to identify and
respond to risks and opportunities in their
areas of expertise.
By adopting a proactive approach to risk
management that considers both risks and
opportunities, we aim to unlock value, drive
innovation, and sustain long-term success
for our organisation and its stakeholders.
Through strategic risk-informed decision-
making, and staying vigilant to emerging
risks and opportunities, we strive to position
ourselves for growth and resilience in an
increasingly complex and competitive
business landscape.
32
888 HOLDINGS PLC RISK APPETITE
No
appetite
Low
Moderate
High
Amount and type of risk we are
willing to accept to meet our
strategic objectives.
RISK TOLERANCE
Maximum risk we are willing to
take.
RISK TARGET
Optimal level of risk we
want to take.
RISK LIMIT
Thresholds to
monitor actual
risk exposure
and its deviance
from target or
tolerated risk
levels.
RISK APPETITE
The Group’s risk appetite is to take on
calculated and manageable risks that
are aligned with the strategic objectives.
Whilst we continue to take our regulatory
and compliance obligations seriously and
will aim for minimal risk exposure, we are
prepared to take risks in other areas, where
we have the ability to create value through
selective risk taking in accordance with our
risk appetite, while having the necessary
tools and capability to effectively manage
the exposure.
The Board-level risk appetite is defined
for level two risk categories of our risk
taxonomy, which consists of 31 sub-
categories of the four level One, Strategic;
Financial; Operational; and Regulatory,
risks faced by the business. It is formally
articulated through the Risk Appetite
Statement (RAS) and consists of both
qualitative statements, which articulate
acceptable levels of risk for the risk
categories, and quantitative metrics, which
monitor actual risk exposure.
The adopted risk appetite determines our
approach to risk management, the level of
controls applied and therefore the resources
allocated.
We have defined Board-level Key Risk
Indicators with three tier tolerance
thresholds defined. Level one and two
breaches act as early warning indicators
and suggest that while risks are operating
within acceptable risk appetite levels, they
are approaching the maximum tolerance
level. Further action is then taken to ensure
risks remain within an acceptable level. The
level three threshold is the upper limit of risk
and once reached, indicates that risks are
outside acceptable risk appetite. Immediate
action needs to occur to bring risks within
acceptable levels.
The following principles guide the Group’s
overarching appetite for risk and determine
how these are managed.
Strategic
• The Group’s strategic goals centre
on enhancing our customer value
proposition and creating competitive
advantages through data-led insights
and intelligent automation and delivering
excellence through our products and
technology. Whilst the business maintains
a conservative stance towards risks
that may compromise its brand and
reputation, it is prepared to accept
higher levels of risk within its discretion
to enhance agility in addressing the
demands of a dynamic and evolving
business regulatory landscape.
• The Company is dedicated to building a
sustainable business and the Group has
a low tolerance to risks that could disrupt
the critical foundations of its strategy
and mission.
Financial position
• The Group upholds prudent financial
management practices to maintain a
strong stable financial position, which
includes effective budgeting, cash flow
management, and debt management to
optimise liquidity and ensure long-term
financial sustainability.
• Our capital allocation strategy is guided
by a disciplined approach to prioritise
investments that support our strategic
objectives and generate sustainable
returns. We evaluate risk-adjusted
returns, assess capital requirements, and
optimise our capital structure to enhance
shareholder value.
• We are committed to transparent
financial reporting, providing accurate
and timely information to stakeholders.
This involves adhering to accounting
standards and regulations, as well as
implementing robust internal controls to
safeguard financial integrity.
Operational activities
• The Group prioritises operational
efficiency whilst ensuring returns are
in line with our risk tolerance. We drive
efficiencies across various operational
functions to enhance profitability.
• Upholding the highest standards
of ethics is paramount within our
organisation. We foster a culture of
integrity, ensuring compliance with laws
and regulations. Any attempts to defraud,
misappropriate assets or circumvent
policies are met with zero tolerance.
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FINANCIAL STATEMENTS
SUPPLEMENTARY INFORMATION
RISK MANAGEMENT CONTINUED
RISK APPETITE CONTINUED
RISK CULTURE
We recognise that embedding a strong
risk culture is essential to achieve an
Enterprise Risk Management Framework
which empowers and encourages all our
colleagues to identify and mitigate against
threats, explore opportunities, and achieve
the Company’s mission as one team.
Following the launch of our new Company
values in 2023, we have aligned each of
these with our risk values. Striving to ensure
these risk values are embedded throughout
our Company risk culture is a priority.
THE VALUES, BELIEFS,
KNOWLEDGE AND
UNDERSTANDING ABOUT
RISK, SHARED BY A GROUP
OF PEOPLE WITH
A COMMON PURPOSE.
RISK CULTURE
COMPANY VALUES
BEHAVIOURS
PERSONAL ETHICS
PERSONAL
PREDISPOSITION
TO RISK
Operational activities continued
• As an online B2C and B2B business,
the reliability and security of our IT
infrastructure is indispensable for
maintaining regulatory compliance
and customer loyalty. We maintain a
conservative attitude towards technology
disruptions given their potential to
significantly impact core business
operations.
• We are dedicated to customer excellence
by providing a highly personalised
customer-led offering allowing them
to navigate our products and services
seamlessly, resources and tools that
enable them to make informed decisions
and top-tier customer service, to derive
maximum value from their interactions
with our brand.
Regulatory Compliance
• The business embeds a proactive
compliance culture throughout the
organisation, ensuring adherence to
regulatory requirements. This involves
transparent governance, continuous
training and robust monitoring supported
by clear roles and accountabilities.
• We engage with regulatory authorities,
industry associations and stakeholders
to keep abreast about regulatory
changes, contributing to best practices
and advocating responsible gambling
measures. This collaborative approach
prioritises player safety and social
responsibility.
• We integrate compliance into strategic
planning and decision-making processes
to anticipate compliance challenges,
mitigate risks and identify opportunities
for sustainable growth.
• We are committed to continuous
improvements with regular reviews and
updates to policies, procedures and
controls to ensure adaptability to evolving
regulatory landscapes and emerging
risks.
We entertain our
customers with
safe gambling
experiences.
We work as one
inclusive team
to achieve great
things.
We aim for
excellence,
encourage
creativity,
and have fun.
34
888 HOLDINGS PLC RISK MANAGEMENT METHODOLOGY
Our risk management methodologies draw
from a range of industry best-practice and
established guidance, including the Institute
of Risk Management, ISO 31000, and
Committee of Sponsoring Organizations,
COSO framework, to provide robust and
comprehensive coverage of risks from
identification through to monitoring.
In 2023 this has included redefining our
risk taxonomy to give greater clarity,
understanding and accountability to risks at
each level of the organisation, and ensure
these are mapped dynamically to our
controls and risk performance. The diagram
below shows an overview of activities at
each stage of risk management, applied to
every risk type, every time.
In 2024, we seek to enhance our risk
management methodologies further by
extending the use of our established risk
methodologies and applying these to risk
opportunities. This will contribute to our
Value Creation Plan by utilising the same
rigorous process used to treat threats and
using that to consider how uncertainties
and changes to our business environment
can be used as opportuwnities to raise
our game and drive improved gaming
experience for our customers and value for
our stakeholders.
1. Identify: The initial stage involves identifying
and recognising risks that could impact our
objectives. This phase requires comprehensive
examination of potential events, their causes
and potential consequences, whether they are
opportunities (upside risk) or threats (downside
risks). This includes Business-As-Usual risk
management through risk register activities
and key risk indicator breaches as well as ad
hoc risk incident management.
2. Assess: The assessment stage involves
analysing and evaluating these risks
considering both their likelihood of occurrence
and the potential impact they might have
on the organisation using an enhanced risk
assessment matrix. In this step, we calculate
the inherent risk and assess any existing
controls to arrive at a residual risk rating, which
is then calibrated against our Board-level risk
appetite. This step helps prioritise risks based
on their significance.
1.
IDENTIFY
2.
ASSESS
4. Monitor: This stage focuses on
4.
MONITOR
continuously monitoring risk factors,
tracking the effectiveness of risk responses
and adjusting strategies as needed to ensure
ongoing risk management and mitigation.
We utilise metrics such as Key Risk Indicators
and other performance management activity,
reported regularly through the risk governance
structures from local levels, through to Executive
Committee’s and Board, based on severity.
If there are any material changes to the
performance of a given risk, then this will trigger
further risk activity. Our regulatory assurance
team provide additional second line of defence
oversight, which provides continuous monitoring
and testing through target reviews.
3.
RESPOND
3. Respond: Following the risk assessment, we
then need to develop strategies or responses
to manage the risks effectively. This stage
includes selecting appropriate actions, based
on their prioritisation and impact assessment.
Controls implemented to treat a risk are
considered on the basis both of design and
performance effectiveness and are regularly
assessed through control testing to ensure that
the risk response is effective and appropriate.
BUSINESS CONTINUITY
We operate a Business Continuity
Management System (BCMS) which covers
all global offices and locations where it
is deemed to be beneficial in supporting
our business, our customers, and our
colleagues or is a regulatory requirement.
The programme is aligned to the principles
of ISO 22301:2012.
The firm operates a mixed work area
recovery strategy, which includes work
transfer, work from home and standing down
of non-critical activities.
The BCMS is supported by a Group-wide
Business Continuity Policy and a Group-
wide Major Incident Management (MIM)
Framework.
MIM is used to support any unplanned
events, which have the potential to, or cause
actual major disruption to the business. The
MIM process is subject to regular review
and testing and was most recently invoked
to successfully manage any operational
impacts arising from the outbreak of war in
Israel, where we have a large local office, in
October 2023.
35
ANNUAL REPORT & ACCOUNTS 2023 STRATEGIC REPORT
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FINANCIAL STATEMENTS
SUPPLEMENTARY INFORMATION
RISK MANAGEMENT CONTINUED
PRINCIPAL RISKS AND UNCERTAINTIES
The principal risks and uncertainties that are considered to have a potentially material
impact on the Group’s strategic objectives are set out on the following pages, along
with more detailed commentary and a summary on how the Group mitigates these risks
in the context of our Board Risk Appetite. This list is not exhaustive but encompasses
management’s assessment of those risks which require considered response at this time.
Links to strategic outcomes
1. Drive profitable and sustainable revenue growth
2. Improve profitability and efficiency through operating leverage
3. Deleverage through disciplined capital allocation
KEY
Impact
Negligible
Minor
Moderate
Major
Critical
Trend
Increasing Risk
Stable Risk
Decreasing Risk
RISK
CATEGORY
STRATEGIC
RISKS
RISK
SUMMARY
Brand &
Reputation
ESG
The risk of operational or compliance failures
posing a significant risk to our brand and public
image, potentially undermining our ability to
achieve strategic objectives. Such setbacks
can erode stakeholder trust and diminish our
competitive edge.
The risk that the business does not meet its
environmental, sustainability or governance
objectives.
The risk that changes in financial market prices,
interest rates, exchange rates and market
volatilities lead to issues with suppliers and lenders,
increased costs, and reduced profitability.
The risk that the business fails to meet immediate
and future cash flow needs or to access the capital
required for growth and strategic execution,
potentially impairing operational capabilities, and
financial sustainability.
The risk that the business fails to retain key
colleagues or recruit sufficient experienced
employees to achieve its targets and objectives.
The risk of potential threats and vulnerabilities
arising from the involvement of external parties,
such as vendors, supplies, contractors, and
partners.
The risk of potential threats and vulnerabilities
that can compromise the confidentiality, integrity,
and availability of the business information assets.
It involves the unauthorised access, disclosure,
alteration, destruction, or disruption of sensitive
information including data, systems, networks, and
applications.
The risk of material adverse outcomes in
development, production, or distribution of
products and content, alongside vulnerabilities in
using, deploying, and managing technology.
The risk of potential failure to adhere to relevant
laws, regulations and industry standards including
safer gambling practices and tax regulations.
Such non-compliance could materially affect the
Company’s offering, financial performance, and
legal and regulatory position.
The risk of not meeting the regulatory requirements
in relation to AML and Counter Terrorist financing.
Online platforms can be attractive targets for
criminals to launder illicit funds by depositing
and withdrawing large sums in singular/multiple
transactions.
ACCOUNTABLE
EXECUTIVE
STRATEGY
LINK
IMPACT
Chief Strategy
Officer
1, 2
RISK
TREND
4 5
Chief Strategy
Officer
Chief Financial
Officer
1, 2
2, 3
Chief Financial
Officer
3
Chief People
Officer
Chief Financial
Officer
1, 2
1, 2
Chief Information
Technology
Officer
1, 2
Chief Product
Officer
1, 2
1
1
Chief Risk
& Intelligent
Automation
Officer
Chief Risk
& Intelligent
Automation
Officer
4 5
4 5
3
4 5
4 5
3
2
4 5
3
FINANCIAL
RISKS
Market Risk
Liquidity
& Capital
Management
OPERATIONAL
RISKS
People Risk
Third-party
Risk
Information
Security
Product &
Technology
REGULATORY
AND
COMPLIANCE
RISKS
Regulatory
and
Compliance
Anti-Money
Laundering
(AML)
36
888 HOLDINGS PLC
BRAND & REPUTATION RISKS
Accountable executive
Chief Strategy Officer
Impact
Risk trend
ESG RISKS
Accountable executive
Chief Strategy Officer
Impact
Risk trend
The Group relies on its world-class brands across its key
markets, with brand reputation being a key driver of customer
choice. As such, maintaining a strong reputation is critical to
the ongoing success of the Group.
The Group is dedicated to implementing and maintaining
robust policies, procedures, and controls that ensure the
effective delivery of our Environmental, Social, and Governance
(ESG) objectives.
In various regions where our business operates, there is an
ongoing trend towards the enhancement of regulations
focused on safer gambling and the protection of consumers.
This trend is particularly aimed at safeguarding underage
individuals and players who are vulnerable or at heightened
risk of harm.
Media reporting on the industry has seen continuing and
increased criticism of how individual customers have been
treated. This has led to further calls for additional regulation,
particularly around responsible gambling, affordability and
advertising, and any failure to ensure the business is fully
compliant would result in significant reputational damage, in
addition to sanctions imposed by regulators.
How we manage and mitigate the risk
The business has strong governance policies, procedures
and processes in place to ensure it not only meets its
regulatory obligations but also ensures adequate protection
for customers when they use its services. The Group conducts
regular reviews of our governance, oversight, and control
mechanisms to prevent non-compliance and enhance areas
identified for improvement. This proactive approach ensures
the integrity and effectiveness of our operations, aligning with
best practices and regulatory standards.
All employees receive training designed to foster a safer
gaming environment, equipping them with the skills to identify
and respond to harmful behaviours or underage participation
in both our online and physical retail operations. We provide
vulnerable customers with tools, support, and information on
responsible gaming, collaborating with gambling protection
experts, regulators, and internal teams to adopt and monitor
social responsibility guidelines and proactive communications
and measures for all customers.
The business is committed to maintaining the hard-
won reputation of its brands, with the corporate affairs,
marketing, compliance, risk, and legal teams working closely
with operational and frontline management to ensure all
employees are trained and engaged in acting responsibly
towards all internal and external stakeholders.
KEY
Impact
Negligible
Minor
Moderate
Major
Critical
Trend
Increasing Risk
Stable Risk
Decreasing Risk
ESG issues include risks such as climate change, player
protection, diversity & inclusion, cybersecurity concerns and
social responsibility not just to employees and customers
but also to the communities where the business bases its
operations and retail outlets. ESG risks, particularly those
related to climate, often present unique characteristics distinct
from other types of risk. They are typically marked by a lack
of extensive historical data and exhibit non-linear patterns,
complicating their forecasting and management efforts.
The Group’s strategic focus is on protecting our players from
gambling-related harm, creating an engaging and inclusive
environment where colleagues can thrive and protecting the
environment by achieving net zero direct carbon emissions
by 2030.
How we manage and mitigate the risk
Key ESG policies, procedures and controls to support the ESG
framework are reviewed and updated on an ongoing basis
by the Executive-level Risk and Sustainability Committee, with
overall oversight provided by an ESG Committee of the Board.
The business maintains oversight of the Group’s performance
against its sustainability strategy (as defined in the Company’s
ESG Framework and as amended from time to time), including
the monitoring of any material risks which could threaten the
financial and operational performance of the Company and
its strategic objectives, including its commitment to corporate
social responsibility.
The Group has developed sustainability metrics and measures
to monitor progress on performance against management
initiatives and any sustainability-related commitments
communicated externally in support of the Company’s
objectives.
Management constantly reviews global developments and
considers the Company’s position on emerging sustainability
issues as well as reviewing any other matters relevant to
sustainability or ESG issues raised.
37
ANNUAL REPORT & ACCOUNTS 2023
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FINANCIAL STATEMENTS
SUPPLEMENTARY INFORMATION
RISK MANAGEMENT CONTINUED
MARKET RISKS
Accountable executive
Chief Financial Officer
Impact
Risk trend
LIQUIDITY & CAPITAL MANAGEMENT RISKS
Accountable executive
Chief Financial Officer
Impact
Risk trend
Liquidity risk is the risk that the Group has insufficient funds
available to settle its liabilities as they fall due. The Group
generates strong operating cash flows and aims to maintain
sufficient cash balances to meet its anticipated working
capital requirements based on regularly updated cash flow
forecasts. Liquidity requirements that cannot be met from
operational cash flow or existing cash resources would be
satisfied by drawings under the Group’s Revolving Credit
Facility and overdraft facility.
We fund our investments in people, product, marketing, and
technology with positive cash flows generated from our trading
activities and available cash resources. As the business
continues to invest in strengthening its core capabilities there
could be increased need to reduce operating costs and
improve liquidity by removing duplications, delivering best in
class and scalable shared functions, and driving efficiency to
reinvest in growth.
How we manage and mitigate the risk
We manage our liquidity risk through continual focus on
the Group’s operational cash flow forecasting capabilities
and management of cash in the business, by reporting on
unrestricted and available cash balances, and by ensuring
we remain within our banking covenants. The Group also
maintains a £150m Revolving Credit Facility from which it can
draw in the event there is a need for liquidity.
Our current priority is to reduce our leverage, with a strong
focus on disciplined capital allocation and prioritising cash
generation and debt reduction, including the suspension of
dividends until leverage is below 3x.
Management performs stress tests and reverse stress tests
to identify conditions that would be required to compromise
the Group’s liquidity. Plans and actions are thereafter put in
place to further conserve or generate cash to mitigate such
scenarios occurring.
The acquisition of William Hill was funded through various
means, including significant debt facilities. The Group
has implemented a series of hedging strategies, securing
approximately 70% of our interest costs at fixed rates for the
next two years, while also aligning the currency composition of
our debt more closely with that of the Group’s financial profile.
Despite these measures, the Group remains susceptible to risks
associated with changes in interest rates and currency values.
Such fluctuations could elevate our borrowing costs, potentially
diverting financial resources away from critical areas such as
growth initiatives, marketing efforts, and the development and
launch of new products and projects.
The Group is also exposed to foreign exchange rate
fluctuations and risks in its financial reporting. A substantial
part of the Group’s deposits and revenues are generated in
GBP, EUR and other currencies, whilst the Group’s operating
expenses are largely incurred in local currencies, primarily
GBP, EUR, ILS and USD with incremental exposure to operating
expenses in Swedish Krona and Polish Zloty. The Group also
has debt servicing costs which are denominated in USD and
EUR, partially hedged in GBP.
How we manage and mitigate the risk
The Group has implemented measures to mitigate the risks
associated with variable interest rates, successfully hedging
70% of our loans against interest rate fluctuations. Additionally,
our treasury team continually seeks to optimise our debt
portfolio by leveraging market opportunities. We are also
enhancing our operational cash flow forecasting and cash
management practices, regularly reporting on unrestricted
and available cash balances, and ensuring compliance with
our banking covenants. Management diligently monitors our
liquidity buffer and provides regular updates on our liquidity
headroom, including modelling downside sensitivities and
scenarios.
We have effectively reduced foreign exchange risk by
adopting policies to hedge certain costs in GBP, including
negotiating with suppliers to change invoicing to GBP. The
Group has entered FX or cross-currency swaps to hedge
part of its ongoing USD and EUR exposure arising due to the
acquisition financing and its ongoing EUR exposure under
outstanding notes. We have also secured forward contracts to
hedge the Israeli Shekel (ILS) against revenues in Canadian
Dollars and GBP, further solidifying our financial stability.
KEY
Impact
Negligible
Minor
Moderate
Major
Critical
38
Trend
Increasing Risk
Stable Risk
Decreasing Risk
888 HOLDINGS PLC
PEOPLE RISKS
Accountable executive
Chief People Officer
Impact
Risk trend
THIRD-PARTY RISKS
Accountable executive
Chief Financial Officer
Impact
Risk trend
Our colleagues across all our business functions are vital
to ensuring our day-to-day operations are undertaken
efficiently and effectively and to the successful delivery of our
strategic business objectives. Competition for highly qualified
personnel is elevated in many of the locations in which the
Group is based. Ensuring our colleagues are well remunerated,
managed and supported is fundamental to the success of the
business.
The integration and operating model changes following
the acquisition of the William Hill have introduced some
uncertainty for our colleagues across the business, which does
carry a risk with regard to staff retention in particular, but also
recruitment in the short term.
How we manage and mitigate the risk
The Group continually benchmarks remuneration and benefits
packages against similar businesses to ensure we remain
competitive, which helps to ensure we retain key employees,
and continue to attract new quality recruits to support the
delivery of our strategy.
Management ensure that regular communication is held with
all our colleagues so that they are aware of any organisational
changes as soon as possible, particularly for those affected
either directly or indirectly.
Our People team has a number of strategies in place to ensure
that we do our utmost to protect both the physical and mental
wellbeing of all our colleagues.
The Board has an active Nominations Committee, which is
responsible for succession planning at the Board and senior
management levels and is supported as necessary by external
executive recruitment agencies. Succession planning is also
undertaken for our other management positions and for key
personnel across all business functions.
To effectively deliver our products and services to customers
the Group has reliance upon certain critical suppliers of
technology, payment services, marketing, gaming products,
sports content and media. The effective management of
critical third-party relationships and performance is key to
delivering our strategic objectives. Any failure of our suppliers
to provide services to us may have a significant adverse
impact on our own operations.
The Group also has certain strategic partnerships where we
supply third-party operators with business-to-business (B2B)
gambling services in the United States. Any risks to our B2B
partnerships or meeting our contractual obligations with them
must be managed to ensure the long-term viability of our
operations linked to these relationships, and to ensure we can
meet our strategic growth targets.
How we manage and mitigate the risk
The business ensures that we manage and maintain all our
B2B partnerships commercially, including the functionality and
technology of the B2B platforms offered, competitive pricing,
maintaining an ongoing relationship with B2B partners, and
ensuring that 888 has good relationships with all our strategic
partners so that we have a clear understanding of the
requirements and expectations of our B2B partners and their
stakeholders.
Key suppliers are managed through supplier relationship
management with procurement and operational managers
and through regular reviews of performance against service
level agreements (SLAs), with mitigating action taken where
variances are identified. Regular supplier financial due
diligence is monitored and assessed to ensure suppliers have
no liquidity problems and hence operational concerns that
could impact our ability to serve our customers.
39
ANNUAL REPORT & ACCOUNTS 2023
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GOVERNANCE
FINANCIAL STATEMENTS
SUPPLEMENTARY INFORMATION
RISK MANAGEMENT CONTINUED
INFORMATION SECURITY RISKS
PRODUCT & TECHNOLOGY RISKS
Accountable executive
Chief Information
Technology Officer
Impact
Risk trend
Accountable executive
Chief Product Officer
Impact
Risk trend
There is an ongoing risk that cyber-attacks, such as
Distributed Denial of Service (DDoS) by malicious third parties,
could impact our technology systems and, consequently, our
operations. This risk extends to the potential theft or misuse
of customer and business data by both internal and external
entities.
As a company, we acknowledge the importance of
innovation and digital transformation, and we recognise
that these initiatives come with inherent risks. We recognise
that consolidating multiple systems can be complex and
challenging and may lead to potential disruptions in our
operations.
Cyber-attacks leading to data theft could expose the Group
to 'ransom' demands or regulatory sanctions including
fines and reputational damage, which could lead to loss of
customer confidence in the business.
The loss of availability of our technology and
communication systems, or those in our key suppliers’
infrastructure could cause significant disruption and cost
to the business, and lead to revenue loss both during
the incident and in the aftermath if customers move
their business to our competitors. Lengthy down-time
could also cause us to breach regulatory obligations.
How we manage and mitigate the risk
Measures to mitigate the risks to our business and technology
infrastructure include the procurement and use of anti-DDoS
services and anti-virus protection from leading suppliers.
Physical and logical network segmentation is also used to
isolate and protect our networks and to restrict malicious
activities. To minimise dependence on telecommunication
service providers, the Group invests in network infrastructure
redundancies whilst regularly reviewing its service providers.
As part of integration plans, the Group is planning to migrate
William Hill and Mr Green systems to the existing 888 platform
over the coming years which will strengthen the Business
Continuity and Disaster Recovery options currently available to
these parts of the Group.
Systems are in place which are designed to identify and alert
management to problems related to systems, key business
indicators and issues around customer service. Changes,
incidents and SLA key performance indicators are tracked to
ensure a consistent and well managed customer experience.
Capacity headroom and system-wide availability is measured
and monitored so that actions can be proactively taken to
manage any risks to service availability. Network-related
performance issues are addressed by rerouting traffic using
different routes or providers.
In pursuing our goal of building one unified global scalable
technology platform, we understand that it requires us to take
on higher levels of risk in the short term. However, we believe
that the potential rewards outweigh the risks. By creating a
unified platform, we will be able to streamline our operations,
improve efficiency, and enhance our ability to respond to
changing market conditions.
We recognise the importance of developing high-quality
products to meet the evolving needs of our customers,
however, acknowledge that this comes with inherent risks. We
understand that product and content development require
significant investments in resources, time, and expertise.
Additionally, the fast-paced and constantly changing nature
of the market may require us to take on higher levels of risk in
the short term.
How we manage and mitigate the risk
Our Product & Technology teams place the highest priority
on initiatives that are driven by compliance requirements to
ensure that we always meet our regulatory objectives. At the
same time, we recognise the importance of providing the
best possible customer experience, and we're committed
to focusing on delivering our clear Group customer value
proposition.
To achieve this goal, we’re dedicated to creating seamless
core journeys and engaging gaming experiences across all of
our product verticals, including casino, poker, and sports. By
prioritising both compliance-driven initiatives and improving
the customer experience, we believe we can achieve our
mission of delighting players with world-class betting & gaming
experiences, while meeting all regulatory requirements.
We monitor progress through quarterly planning which
undergoes a rigorous assessment and prioritisation process
to ensure our strategic objectives are being met. Key initiatives
are tracked through performance tracking.
KEY
Impact
Negligible
Minor
Moderate
Major
Critical
40
Trend
Increasing Risk
Stable Risk
Decreasing Risk
888 HOLDINGS PLC
REGULATORY AND COMPLIANCE RISKS
ANTI-MONEY LAUNDERING RISK
Accountable executive
Chief Risk & Intelligent
Automation Officer
Impact
Risk trend
Accountable executive
Chief Risk & Intelligent
Automation Officer
Impact
Risk trend
Compliance with regulatory requirements is critical to
maintaining the Group’s licences, protecting our customers
and driving growth. With most of our revenue generated from
licensed jurisdictions and more countries looking to regulate,
the importance of such licences to the business is constantly
increasing.
Our strategic focus is on regulated markets, as these represent
the best opportunity for sustainable growth as regulation
drives better outcomes for customers, for the business, and
for wider stakeholders. The integrity of our privacy and data
protection framework, including the holding and processing
of personal data, is crucial to ensure compliance with our
regulatory obligations and build customer trust.
888 Holdings accepts that regulatory compliance risks may
be present in the ordinary course of business, however the
enterprise risk management approach allows us to identify
these as they arise and implement mitigations and controls
targeted at removing and reducing these risks and, where
possible, improving player experience, regulatory transparency
and stakeholder engagement. The growing complexity of the
Company’s regulatory footprint means a robust understanding
of the legal and regulatory position in key locations worldwide
is crucial to mitigating this risk combined with strong
relationships with regulators.
How we manage and mitigate the risk
We manage our regulatory risk by routinely consulting with
legal advisers in various jurisdictions where our services
are marketed, or which generate significant revenue for
the Company. We obtain frequent and routine updates
regarding changes in the law in jurisdictions applicable to our
operations, working with local counsel to assess the impact
of any changes on our operations. We constantly adapt and
moderate our services to comply with legal and regulatory
requirements, and ensure we have the correct controls in place
to assess and manage regulatory requirements.
We are in contact with regulators, either directly or through
local counsel, ensuring that we are continuously kept up to
date with regulatory updates, expectations, and changes to
technical standards and other applicable regulations.
The business also ensures compliance with safer gambling
regulations and protects customers by leveraging technologies
and promoting positive play. We continually monitor customer
behaviour and offer a range of tools to players to help them
manage their play, and we intervene where necessary.
The business also prevents access from certain restricted
jurisdictions using multiple technologies as appropriate to
ensure it is always in compliance.
We support compliance with privacy and data protection
regulations in accordance with our risk appetite. The Company
has an appointed Group Data Protection Officer to manage
our compliance with associated privacy and data protection
regulations. The Data Protection function is tasked with
advising on and monitoring compliance with key regulations,
recommending and implementing key controls such as policy
and training where required.
Ensuring compliance with regulatory requirements and the
prevention of money laundering is critical to maintaining our
licences. We are committed to combating financial crime and
ensuring that proceeds of crime do not enter the business.
The EU Supranational Risk Assessment 2022 estimates the
risk level for online gambling is very high for both money
laundering and terrorist financing in the absence of controls.
Therefore, we make every effort to ensure that controls related
to AML and CFT are robust and reviewed regularly to provide
assurance.
How we manage and mitigate the risk
888 Holdings has no appetite for establishing or maintaining
relationships with anyone appearing on a relevant sanctions
list or where otherwise prohibited by applicable law or
regulation.
We maintain a robust anti-financial crime compliance
framework to effectively mitigate these risks.
We have a strong suite of AML/CFT processes, systems
and controls and routinely review and upgrade these where
required, including in response to regulatory feedback.
Throughout 2023, teams made significant enhancements
across our AML controls, specifically including; AML Scorecard,
Politically Exposed Persons Screening, Automated and
Manual Screening processes, and overall governance. This
was demonstrated by the inclusion of a sanitised William Hill
AML case study within the publication of the UK Financial
Intelligence Unit’s August 2023 ‘Suspicious Activity Reports
Reporter Booklet’ as an example of best-practice AML
responses.
Our customer facing staff are trained at least annually
to identify and report such activity to the dedicated AML
specialist teams. Our AML compliance programme and
associated compliance monitoring programme is subject
to ongoing oversight through our corporate governance
framework as well as independent internal audit.
EMERGING RISKS
Emerging risks are new and developing risks that are often
difficult to quantify but may materially affect the operations of
the business. These are usually uncertain risks external to the
business or which relate to changes in the markets in which the
Company operates. The Group takes a proactive approach to
managing them, with the objective of mitigating their impact on
the delivery of its strategy.
Examples of emerging risks include global economic changes,
increasing risk of global conflicts and geo-political volatility, the
ongoing war in Ukraine, technological advancements (including
AI), and climate change.
41
ANNUAL REPORT & ACCOUNTS 2023
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SUPPLEMENTARY INFORMATION
VIABILITY STATEMENT
In accordance with provision 31 of the 2018
UK Corporate Governance Code (the 2018
Code), the Group has assessed its prospects
over a longer period than the 12 months
required by the Going Concern assessment.
The Directors confirm that they have a
reasonable expectation that the Group
will continue to operate and meet its
liabilities as they fall due, over a three-year
period to December 2026. In making this
statement, the Board has assessed the
Company’s current position, its prospects
and its strategy, as well as performed a
robust assessment of the principal risks
facing the Company both individually and in
aggregate, including those risks that could
potentially threaten the Group’s business
model, future performance, solvency or
liquidity.
The nature of the risks and opportunities
faced by the Group (in particular, the actual
or possible impact of future fiscal and
regulatory changes, regulatory actions and
the pace of technological change) limits the
Directors’ ability to make reliable longer-term
predictions. Accordingly, the Board has
agreed to maintain a three-year horizon to
allow for a greater degree of certainty in its
assumptions.
The Directors’ assessment includes a
financial review, which is derived from the
Group’s detailed bottom-up budget for
2024 and from the Group's medium-term,
top-down five-year forecast growth rates
for 2025 and 2026, being the most recent
Board-approved forecasts. It identifies the
expected cash flows, net debt headroom
and funding covenant compliance
throughout the three years under review.
With respect to the period assessed, the
Directors have considered:
• The Group’s resilience to threats to its
viability in a broad range of severe but
plausible scenarios; and
• Both qualitative and quantitative
analyses, including the combined impact
of the crystallisation of multiple risks
simultaneously, which the Directors
consider sufficiently robust to make a
sound statement.
The principal risks facing the Group, and
how the Group addresses such risks, are
described in this Strategic Report, and the
key risks are summarised in the section
‘Principal risks and uncertainties’ which can
be found on pages 36 to 41.
The most relevant of these risks to the
viability of the Group were considered to be:
• Changing regulation in Online, and
specifically: the impact of a potential
introduction of affordability measures
in the UK; a maximum stake on online
slot machines in the UK; the impact of
potential new regulations in the European
countries in which we operate; and
the impact of any breach of licence
conditions or that underlying contracts
in question are null and void given local
licensing regimes;
• Reputational impact and fines from
regulators if we have a breach in our
compliance procedures that results in
a failure to meet the expectations of
regulators, our shareholders and broader
stakeholders;
• A major cyber-attack and/or data
protection violation, resulting in the loss
of availability of our online offering,
reputational damage and fines for
breach of GDPR regulations;
• Delivery and timing of the Group’s
return on marketing investment, resulting
in reduced revenues in the markets
targeted; and
• The impact of increasing interest rates on
the Group’s floating rate debt.
Sensitivity analysis on these risks has been
undertaken to stress test the resilience of
the Group. The sensitivity analysis considers
all of the Group’s principal risks and models
the impact of those considered relevant
to the Group's viability. This modelling
tests a number of the main assumptions
underlying the forecasts, as well as effective
mitigation that could occur to avoid or
reduce the impact or occurrence of the
risk. The mitigations identified by the Group
include but are not limited to drawing down
on the Revolving Credit Facility (£150m
maturing January 2028, which was undrawn
at 31 December 2023), and stopping or
decreasing non-essential capital investment
and variable costs including marketing
spend.
Through this analysis, the Directors have
a reasonable expectation that no single
event or plausible combination of events
would be sufficient to impact its viability, and
even under the most severe but plausible
combination of events the Group will be
able to continue in operation and meet its
liabilities as they fall due over the three-year
period of assessment.
42
888 HOLDINGS PLC 43
ANNUAL REPORT & ACCOUNTS 2023 STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SUPPLEMENTARY INFORMATION
BOARD OF DIRECTORS
2023 was a year of continuing change
for the Group. During the year the focus
of the Board was on the post-acquisition
integration of 888 and William Hill.
The Board presided over significant change to the management
of the business during the year. This included the appointment
of a new CEO and new CFO followed by a transformation of the
Executive Committee early in 2024. The Board believes that the
reformed Executive Committee reflects the future needs of the
business in meeting its strategic objectives for long-term success.
Lord Mendelsohn
Chair
Anne de Kerckhove
Senior Independent Non-
Executive Director
N
N R E
Per Widerström
Chief Executive Officer
Sean Wilkins
Chief Financial Officer
Anne was appointed Senior
Independent Director in
March 2021 and Workforce
Engagement Designated Non-
Executive in July 2022.
Anne is Chair of Eagle Eye
Solutions Group Plc, the loyalty
scheme technology specialist,
and a Non-Executive Director
of Blackbird plc, a cloud video
editing and publishing platform.
Previously, she was the CEO of
Freespee, Iron Capital and the
Managing Director EMEA for
Videology, Global Director of
Reed Elsevier, and COO and
International Managing Director
at Inspired Gaming Group. Anne
is an angel investor and mentor
for early-stage start-ups and
entrepreneurial funds including
CRE and Daphni. She holds a
Bachelor of Commerce from
McGill University and an MBA
from INSEAD.
Age: 51 Tenure: 6 years
Lord Mendelsohn was appointed
as Non-Executive Chair of the
Board in March 2021. He is an
experienced gambling sector
professional with more than 20
years’ industry experience that
includes co-founding Oakvale
Capital LLP, a leading M&A and
strategic advisory boutique
focusing on the gaming,
gambling and sports sectors. He
also serves as Senior Adviser to
Value Retail Plc and RG Advisors.
He co-founded LLM
Communications, a corporate
and public affairs consultancy
which was acquired by Financial
Dynamics and served as a
Managing Director and later
as Chair of the Global Issues
Division. He is an investor in early
stage and growth companies
in various sectors including
technology, leisure and energy.
Lord Mendelsohn was appointed
to be a Working Peer in the
House of Lords in October
2013. He has served as a
Shadow Minister for Business,
International Trade and
Innovation and Skills.
Age: 57 Tenure: 3 years
44
Per was appointed as the
Group’s Chief Executive Officer
and joined the Board from 16
October 2023.
Sean was appointed as the
Group’s Chief Financial Officer
and joined the Board from 1
February 2024.
Sean has 17 years of experience
in CFO roles at both private
and public companies, having
most recently held the position
of Group CFO of Superbet, a
leading omni-channel betting
and gaming business with
operations primarily across
Romania, Poland, Serbia and
Belgium.
Prior to Superbet, Sean held CFO
roles at several consumer-facing
businesses including Big Bus
Tours, Domino’s Pizza Group PLC,
Tesco Malaysia, Tesco Telecom,
and O2 Asia.
Sean is a chartered
management accountant
and holds a Bachelors
degree in Philosophy, Politics
and Economics from Oxford
University.
Age: 54 Tenure: <1 year
Per has more than 17 years of
experience in the online gaming
industry, having most recently
held the position of CEO at
Fortuna Entertainment Group, a
market-leading omni-channel
betting and gaming business
across Central and Eastern
Europe, from 2014 to 2022.
Prior to Fortuna, Per held a
succession of senior roles
across leading online gaming
businesses from 2006 onwards,
including Managing Director of
Gala Interactive at Gala Coral
Group Plc, Chief Operating
Officer of PartyGaming plc,
Chief Integration Officer at Bwin.
Party Digital Entertainment Plc,
and group CEO and Chair of the
Board at Expekt.com.
Prior to joining the gaming
industry, Per held a range
of senior operational and
commercial roles at large
global organisations, including
COO of Kyivstar, CEO of Telenor
Mobile Sweden, and Director,
Operational Marketing and
Business Development for The
Coca-Cola Nordic Services.
Per holds a Masters in
International Accounting and
Finance from the London School
of Economics.
Age: 58 Tenure: <1 year
888 HOLDINGS PLC Lord
Mendelsohn
Anne
de Kerckhove
Mark
Summerfield
Limor Ganot
Andrea
Gisle Joosen
Ori Shaked
NON-EXECUTIVE SKILLS AND EXPERIENCE
Finance, audit and risk management
Remuneration
Technology
M&A and capital markets
Gambling/gaming
Marketing/Branding
International business
Consumer services
Mark Summerfield
Independent Non-Executive
Director
Limor Ganot
Independent Non-Executive
Director
Andrea Gisle Joosen
Independent Non-Executive
Director
Ori Shaked
Non-Executive Director
A E G
A N R
A R
N E G
Limor was appointed as a
Non-Executive Director of the
Company in August 2020. She
is managing partner of Gefen
Capital, a US-Israeli venture
capital fund that invests in
disruptive technologies; a board
member of Diners Club Israel;
a member of the management
of the Israeli friends of the
Weizmann institute of science,
which is one of the world’s
leading multidisciplinary basic
research institutions in the
natural and exact sciences;
and former co-CEO of Alon Blue
Square Israel. She is a certified
public accountant who started
her professional journey in the
corporate finance division at
KPMG and received her Bachelor
of Science in Accounting
and Economics from Tel Aviv
University.
Age: 51 Tenure: 4 years
Mark was appointed as Non-
Executive Director and Chair
of the Audit (now Audit & Risk)
Committee in September 2019.
Mark worked as a Chartered
Accountant for KPMG in the UK
and US for 29 years, 18 as a
partner. His roles included Global
Head of Gaming, UK Head of
Audit for Technology, Media and
Telecoms (TMT) and UK Head
of Assurance. He has extensive
knowledge and experience in
auditing, financial reporting and
governance, as well as mergers
and acquisitions and capital
market transactions.
Mark spent most of his career
working for companies in the
TMT and leisure sectors and built
KPMG’s gaming practice, working
with a number of online gaming
operators. He was also William
Hill’s interim CFO for 15 months
from July 2016, helping set the
Group’s strategic direction and
assisting with its transformation
and technology programmes.
Age: 57 Tenure: 5 years
Andrea was appointed as a
Non-Executive Director of the
Company in July 2022.
Andrea is a highly experienced
non-executive director, having
held leadership positions
across multiple international
technology and consumer
industries companies. Andrea
currently chairs the boards of
Bilprovningen AB and Charge
Amps AB.
Andrea previously chaired
Sweden-headquartered Acast
AB and was a Non-executive
Director at Currys plc, Billerud
AB, ICA Gruppen, James Hardie
Industries plc and Mr Green &
Co, the online gaming business
which was acquired by William
Hill plc in 2018. During her
executive career, Andrea has
held numerous leadership roles
in the media and technology
sectors including as CEO of
Boxer TV Sweden and as
Managing Director of Nordics for
Panasonic, Chantelle Group and
Twentieth Century Fox.
Andrea has a BSc in Business
Administration and MSc in
International Marketing from
Copenhagen Business School.
She has also completed
Executive Education at Harvard
Business School in both
Effective Negotiations and Audit
Committees in a New Era of
Governance.
Age: 60 Tenure: 2 years
Ori was appointed to the Board
in September 2022.
He is a gaming entrepreneur and
experienced game producer.
He was previously employed
by the Group until 2017 as a
game producer, online marketer
and business development
manager. Ori acts as an early-
stage investor in gaming and
blockchain start-up companies.
He holds a BA in Business
Management from Tel Aviv
University. Ori is not considered
independent following his
appointment by the Group’s
largest shareholder, Salix Trust
Company (BVI) Limited, in bare
trust on behalf of Dalia Shaked,
in line with its right to appoint a
non-executive director.
Age: 40 Tenure: 2 years
45
ANNUAL REPORT & ACCOUNTS 2023 STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SUPPLEMENTARY INFORMATION
CORPORATE GOVERNANCE REPORT
Our commitment to corporate governance
is fundamental to ensuring we operate
in a responsible and transparent
manner, delivering long-term value
to our stakeholders, including our
shareholders, employees, customers,
and the communities in which we operate.
With the joining of 888 and William Hill,
our governance framework plays a key
role to ensure that our combined business
is managed effectively, that the Board
has appropriate oversight of strategic
matters and to facilitate an effective
decision-making process.
Although the Company is incorporated in
Gibraltar, the UK Corporate Governance
Code 2018 (the 'Code' or 'UK Corporate
Governance Code') applies pursuant
to the UK Listing Rules as the Company’s
Ordinary Shares are admitted to the
premium segment of the UK Official List
and to trading on the London Stock
Exchange’s main market for listed securities.
This statement also includes items
required by the UK Listing Rules and the
Disclosure Guidance and Transparency
Rules, including how the 'Main Principles'
of the UK Corporate Governance Code have
been applied.
As at 31 December 2023, the Company
fully complied with the provisions set
out in the Code. However, following the
departure of Itai Pazner as CEO in January
2023, Lord Mendelsohn was appointed as
Executive Chair on an interim basis until 16
October 2023 when a permanent CEO was
appointed.
The Board acknowledged that this was
not in keeping with the provision of the
Code requiring that the roles of Chair and
CEO be exercised separately. However, it
was considered that this interim measure
was in the best interests of the Company
and its stakeholders which ensured robust
leadership during the transition period. Lord
Mendelsohn returned to his post as Non-
Executive Chair following the appointment
of Per Widerström in October 2023.
BOARD LEADERSHIP
The Board of Directors is responsible
for overseeing the management of the
Company and setting its strategic direction.
As at 31 December 2023, our Board
comprised six Non-Executive Directors and
one Executive Director, all of whom have
a range of relevant skills and experience
to bring to the Company.
The Non-Executive Directors bring
independent judgement to bear on issues of
strategy, performance, and risk, and provide
constructive challenge to the Executive
Directors. The Executive Directors are
responsible for implementing the Company’s
strategy and delivering its performance.
Meetings and attendance
There are six regularly scheduled Board
meetings planned per year. However,
when urgent decision-making is required
between meetings on matters reserved for
the Board, there is a process in place to
facilitate discussion and decision-making.
The Directors regularly communicate and
exchange information irrespective of the
timing of meetings.
Set out below are details of the Directors’
attendance record at Board and Committee
meetings in 2023. All meetings in 2023 were
held in person in London.
The Chair has responsibility for ensuring
that agendas for Board meetings are set
in advance. Board papers are issued to
Directors sufficiently in advance of meetings
to facilitate both informed debate and
timely decisions. If a Director is unable to
attend a meeting, he or she is given the
opportunity to raise any issues and give
any comments to the Chair in advance.
None of the Directors have raised any
concerns about the running of the Company
or a proposed action which needed to
be recorded in the Board minutes of the
Company or in a statement to the Chair for
circulation to the Board.
Meetings with Non-Executive Directors
At each Board meeting, the Chair
designates time for the Non-Executive
Directors to meet without the Executive
Directors being present.
The Non-Executive Directors also meet
once per year without the Chair present
in order to appraise the performance of
the Chair and take into account the views
of the Executive Directors. This process is
led by the Senior Independent Director
in accordance with the UK Corporate
Governance Code. This meeting took place
in March 2023.
DIRECTOR MEETING ATTENDANCE FOR YEAR ENDED 31 DECEMBER 2023
Total held in year
Lord Mendelsohn
Per Widerström2
Yariv Dafna3
Anne de Kerckhove
Mark Summerfield
Limor Ganot
Andrea Gisle Joosen
Andria Vidler4
Ori Shaked
Board
Audit & Risk
Committee
Remuneration
Committee
Nominations
Committee
ESG
Committee
Gaming
Compliance
Committee1
6
6
4/4
6
6
6
5
4/4
6
5
—
—
—
4/4
5
4
1/1
—
—
4
—
—
—
4
2/2
3
—
—
—
2
—
—
—
2
2
—
—
—
—
2
—
—
—
2
2
—
—
2
—
4
—
—
3/3
—
4
—
—
—
0/1
1. Michael Alonso is Chair of the Gaming Compliance Committee but is not a Board member.
2. Per Widerström was appointed to the Board on 16 October 2023.
3. Yariv Dafna stepped down from the Board on 2 October 2023.
4. Andria Vidler stepped down from the Board on 30 September 2023.
46
888 HOLDINGS PLC Board activities 2023
During 2023, the Board oversaw the strategic
development of the Company including the
post-acquisition integration of William Hill.
It reviewed and monitored the operational,
trading and financial performance of the
Company, including how it creates value
over the long term.
Also, at each meeting the Board undertook
the following:
• scrutinised the operational performance
of the Group;
• reviewed the Group's risk management
and compliance processes;
• received updates on our people and
At every meeting the Board receives and
discusses updates from respective Executive
Committee members on progress against
strategy, financial performance, operational
matters and compliance and regulation. In
2023 the Board spent a significant amount
of time considering the Group’s risk, systems
of internal control, and the integration of 888
and William Hill following the acquisition.
culture;
• monitored the Group's safer gambling
activities;
• received updates on shareholder views;
and
• monitored regulatory developments.
Board responsibilities and procedures
The Directors consider it essential that
the Company should be both led and
controlled by an effective Board. The Board
focuses upon the Company’s long-term
objectives, strategic and policy issues. It
formally and transparently considers the
management of key risks facing the Group,
as well as determining the nature and extent
of significant risks it will take in achieving
its strategic objectives. It maintains and
reviews annually the effectiveness of the
Company’s risk management and internal
control systems. The Board is responsible
for acquisitions and divestments, major
capital expenditure projects and considering
the Company’s budgets and dividend
policy. The Board also determines key
appointments. The Board receives regular
updates on shareholders’ views.
The Board has an established calendar
of business which covers the financial
calendar, strategic planning, annual budgets
and performance self-assessments, as
well as the conduct of standing business.
The calendar forms the basis for effective
integration of business activities as between
the Board and its principal committees,
which individually consider their own
operating frameworks against the Board’s
business programme.
The Board delegates certain matters to its
principal committees who provide reports
and make recommendations to the Board.
The terms of reference for each committee
are available on the Company’s website.
BOARD ACTIVITIES 2023
Audit & Risk Committee
ESG Committee
Remuneration
Committee
Nominations
Committee
Gaming Compliance
Committee
Assists the Board
in discharging its
responsibilities
for the integrity
of the Company’s
financial statements,
risk management,
assessment of the
effectiveness of the
system of internal control
and the effectiveness
of internal and external
auditors.
Assists the Board in
defining and reviewing
the Company’s strategy
relating to ESG matters,
setting relevant KPIs,
developing ESG policies
and compliance with
legal and regulatory
requirements.
Determines the
Company’s policy on
the remuneration of
Executive Directors,
other members of the
Executive Committee and
the Chair of the Board.
The Committee also
reviews workforce policies
and practices.
Assists the Board by
keeping the Board
composition under
review and makes
recommendations
in relation to Board
appointments. The
Committee also assists
the Board on issues
of Executive Director
succession planning,
conflicts of interest and
independence.
In accordance with
Nevada Gaming Control
Board requirements the
Committee is entrusted
with making sure that the
Group’s licensed gaming
activity is carried out with
honesty and integrity, in
accordance with high
moral, legal and ethical
standards, and free from
criminal and corruptive
elements.
Read more on
pages 56 to 61
Read more on
page 54
Read more on
pages 62 to 65
Read more on
pages 52 and 53
Read more on
page 51
47
ANNUAL REPORT & ACCOUNTS 2023 STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SUPPLEMENTARY INFORMATION
CORPORATE GOVERNANCE REPORT CONTINUED
In addition to the above, the Board also considered the following key activities.
JANUARY
• Deep-dive review of the USA, 888Africa and Mr Green operations and considered further strategic
development opportunities.
• Post-acquisition restructuring progress review.
• Received updates on Risk and AML controls.
• Received an update from Investor Relations on Market feedback, and stakeholder engagement.
• Reviewed, considered, and approved the 888Africa corporate & strategic development plan.
• Approved the FY22 annual report and financial statements.
• Received an update from Investor Relations.
• Deep-dive review of the Middle East market.
• Post-acquisition restructuring progress review.
• Received updates on Technology and Cyber Security.
• Reviewed an updated proposal on the launch of a casino product in Michigan.
• Deep-dive review of the 888 Poker business.
• Received an update from Investor Relations.
• Received an update on Business Health checks and a review of core customer journeys.
• Received an updated risk and compliance report.
• Deep-dive review of the Customer Focus Strategy.
• Post-acquisition restructuring and integration progress review.
• Reviewed the UK government’s gambling reform White Paper overview and impact and prospects assessment.
• Received reports from the Chief People Officer on people strategy and engagement.
• Reviewed the Product & Technology roadmap.
• Received an update from Investor Relations.
• Deep-dive review of the Casino Product performance and strategy.
• Post-acquisition restructuring and integration progress review.
• Received updates on Risk and AML controls, approval of the Group AML Policy.
• Reviewed the new CEO’s 100-day plan.
• Received an update from Investor Relations.
• Reviewed the Group Value Creation Plan.
• Deep-dive review of US strategy.
• Received an update on Corporate Development and M&A.
• Received an update on the UK government’s gambling reform White Paper.
• Reviewed and approved the 2024 Budget plan.
• Received a progress report against the CEO’s 100-day plan.
• Review of the Board’s Division of Responsibilities document.
• Received an update from Investor Relations.
• Reviewed the Group Value Creation Plan.
• Received an update on Corporate Development and M&A.
• Reviewed progress against the Product & Technology roadmap.
• Received updates on Risk and Compliance.
• Reviewed and approved the FY24 budget.
• Approved the UK tax strategy for publication.
MARCH
MAY
JULY
OCTOBER
NOVEMBER
48
888 HOLDINGS PLC Board evaluation
The Board has established a formal process
for the annual evaluation of its performance,
and the performance of its committees
and individual Directors. The evaluation
process covers a range of issues such as
Board processes, composition, roles and
responsibilities, agendas and committee
processes, as well as Board dynamic and
communication.
In accordance with the Code and the
FRC Guidance on Board Effectiveness,
we annually evaluate the performance of
the Board and its committees to assess
their effectiveness. Led by the Chair,
the performance evaluation considers
the balance of skills, experience and
independence of the Board. The annual
performance evaluation is externally
facilitated every three years. The 2023
performance evaluation was internally
facilitated by the Company Secretary and
an update on progress of the actions arising
from this review is set out on the next page.
DIVISION OF RESPONSIBILITIES
Chair, Chief Executive Officer and
Senior Independent Director
Notwithstanding the interim position
described below, there is a clear division
of responsibilities between the Chair
and the CEO, which the Board considers
an important part of its corporate
governance. This is documented and
available on the Group’s website and
also includes the responsibilities of
the Senior Independent Director.
Following Itai Pazner’s departure as CEO
in January 2023, Lord Mendelsohn was
appointed Executive Chair on an interim
basis whilst a replacement was recruited.
Cognisant of the requirements of the
Code and corporate governance best
practice, the Board took advice on the key
considerations to such an appointment.
• The Board considered how it could
be provided with oversight and ensure
independence of judgement with an
Executive Chair in role.
• That any conflicts of interest were
managed appropriately in Board
meetings and discussions and that the
Senior Independent Director moderate or
chair as required.
• That the recruitment of a new CEO,
led by the Nominations Committee, be
expedited so that the arrangements
were on an interim basis only and the
Chair could successfully transition back
to being a Non-Executive as soon as
possible.
• That support be provided by, in particular,
the Senior Independent Director and
other Independent Directors to divide the
workload of the Board.
Following an extensive search, with the
assistance of executive search firm Russell
Reynolds, Per Widerström was appointed as
CEO on 16 October 2023. Accordingly, the
Board reviewed and updated the division
of responsibilities document in advance
of Lord Mendelsohn resuming his duties
as Non-Executive Chair. The Board is
confident that following a handover period
it was appropriate that Lord Mendelsohn
retain his independence. The Nominations
Committee report is on pages 52 and 53.
The role of the Senior Independent Director
is to provide a sounding board for the
Chair, to evaluate the Chair’s performance
and lead the Board’s succession planning,
and to serve as an intermediary for the
other Directors where necessary. This
role was key in 2023 in order to provide
a critical independent perspective.
Reserved powers and delegation
A schedule of matters reserved to the Board
has been adopted and is reviewed and
updated regularly to align it with operational
needs and the Board’s preference to monitor
and, where appropriate, approve matters of
substance to the Group as a whole. This is
available on the Group’s website.
Independent Directors
More than half of the Board are Non-
Executive Directors determined by the Board
to be independent for the purposes of the
UK Corporate Governance Code.
The Board is confident that Lord
Mendelsohn, Mark Summerfield, Limor
Ganot, Anne de Kerckhove, and Andrea
Gisle Joosen are and remain independent
in character and judgement and that there
are no relationships or circumstances which
are likely to affect, or could appear to affect,
their judgement.
COMPOSITION, SUCCESSION
AND EVALUATION
Board composition
During 2023, the composition of the Board
was enhanced with the appointment of
a new CEO and CFO. It comprised the
following Non-Executive Directors: Lord
Mendelsohn (Chair), Anne de Kerckhove
(Senior Independent Director), Mark
Summerfield, Limor Ganot, Andrea Gisle
Joosen, Andria Vidler (to 30 September
2023), and Ori Shaked, as well as Executive
Directors Per Widerström (from 16 October
2023) as Chief Executive Officer, and Yariv
Dafna (to 2 October 2023) as Chief
Financial Officer.
The biographical details of all of the
Directors, setting out their relevant skills
and experience and their professional
commitments, are given on pages 44
and 45.
Board succession
Succession planning is delegated to
the Nominations Committee and more
information can be found on page 52.
Matters within the remit of the Nominations
Committee are also on occasion considered
by the Board. Non-Executive Directors are
currently appointed to the Board for an
initial three-year term, extendable by a
further two additional three-year terms.
The terms and conditions of appointment
of Non-Executive Directors and the service
contracts of Executive Directors are
available to shareholders for inspection
at the Company’s registered office during
normal business hours and at the AGM.
49
ANNUAL REPORT & ACCOUNTS 2023 STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SUPPLEMENTARY INFORMATION
CORPORATE GOVERNANCE REPORT CONTINUED
PROGRESS SINCE MARCH 2023 BOARD EVALUATION
IMPROVE USE OF COMMITTEES
Membership of the committees has been updated to divide workload and skills over the
course of 2023. The Board has begun to delegate areas for the committees to lead on
behalf of the Board. A committee update is scheduled in the board meeting for each
committee chair to report on matters requiring escalation to the full Board. This process is
still evolving and there may be opportunity to improve further.
REVIEW AND CONTINUE TO EVOLVE
THE FORMAT OF BOARD PAPERS
There have been improvements on introducing consistent style and formats as well as the
quality of the content. This will continue to evolve with the addition of the new CEO and CFO
and wider executive team.
CONSIDER OBTAINING ADDITIONAL
ADVICE FROM TECHNICAL SPECIALISTS
TO SUPPORT THE BOARD
Alix Partners were appointed by the Board to work with the team on providing support for
the technology plans and also on creating a robust, comprehensive and clear data set for
Board evaluations and decisions. Changes to the make-up of the Executive Committee will
also evolve these requirements.
DEVELOP RISK MANAGEMENT AND
COMPLIANCE FUNCTIONS AND HOW
THEY REPORT TO THE BOARD
Excellent progress has been made on the development of the Risk and Compliance function.
An Enterprise Risk Management Framework has been developed. Risk taxonomy and Board
Risk Appetite Statements have been established with key risk indicators identified, with issues
and incidents being escalated via the Executive Risk & Sustainability Committee (ESRC).
PROGRESS WITH ADDING RISK TO
AUDIT COMMITTEE AND ESTABLISH
CLEAR LINES OF RESPONSIBILITY FOR
COMPLIANCE RISK
This recommendation has been completed. The Audit Committee has become the Audit
& Risk Committee (ARC). Risk items are brought to the ARC with escalation to the Board
as required. There is a clear governance framework through the ESRC to the ARC. The
ESRC also has a reporting line to the ESG Committee. The Chief Risk Officer has a standing
invitation to both Committee meetings.
DEVELOP PLANS FOR ESG COMMITTEE
OVER NEXT 12 MONTHS
There have been multiple changes to the committee over the past 12 months including to
membership and Chair. Plans are still in development and will align to the new Group value
creation plan.
CONSIDER WHETHER MORE IN-
HOUSE SKILLS SHOULD BE USED FOR
REMUNERATION WORK
The Chief People Officer and Reward Director have taken over responsibility for
remuneration. They work in conjunction with the committee chair to develop the agenda
and papers for the Remuneration Committee. Advice is still obtained from Korn Ferry as
remuneration consultants, but work is now managed and owned internally.
DEVELOP BOARD AND EXCO
SUCCESSION PLANS
There have been significant changes in the ExCo since the 2023 board evaluation. A new
CEO and CFO have been recruited and an almost completely new ExCo put in place.
Committee responsibilities have also been adjusted to spread across the Board.
REVIEW OF GAMING COMPLIANCE
COMMITTEE TO IMPROVE REPORTING,
STRUCTURE AND EFFECTIVENESS
The format of reporting to the committee has completely changed since the last evaluation.
A system of reporting has been developed to mirror the Compliance Plan with all items noted
or updated in the meeting report. The US Compliance Director has taken over responsibility
for preparing the report with input from across the business.
COMPOSITION, SUCCESSION
AND EVALUATION CONTINUED
Board evaluation continued
Following the March 2024 evaluation, the
Board was satisfied that each of the Non-
Executive Directors continues to be effective
and to demonstrate commitment to their
respective roles and recommends them
for re-election at the 2024 Annual General
Meeting.
Shareholder engagement
The Company maintains an active and
regular dialogue with principal and
institutional shareholders and sell-side
analysts through a planned programme of
investor relations and financial PR activity.
The Board keeps up to date with the views
of major shareholders through meetings and
discussions with shareholder representatives
and receives regular feedback directly from
investor relations reports and broker updates
at each Board meeting. The programme of
engagement includes formal presentations
of full year and interim results, analysts’
conference calls and periodic roadshows
and discussion of the Company’s strategy
and governance. The Company Secretary
engages with proxy advisers in advance of
any shareholder meetings.
In addition, throughout the year, the Chair of
the Remuneration Committee has consulted
with major shareholders on proposed
Executive Director remuneration. Details of
engagement with shareholders during 2023
are set out on page 23.
The Non-Executive Directors are available
to talk to shareholders if they have any
issues or concerns or if there are any
matters where contact with the Chair, Chief
Executive Officer and Chief Financial Officer
is inappropriate or where such contact has
failed to resolve the issue.
50
888 HOLDINGS PLC Key stakeholders
The Company’s key stakeholders are
its shareholders, customers, regulators,
colleagues and partners as well as the
communities in which it does business.
The Board takes care to engage with all
its stakeholders, as detailed on pages
22 and 23 and within the ESG and
Sustainability section on page 10 to 21 and
the Remuneration Report on page 65. All
papers presented at Board meetings include
details of how the interests of the Company’s
key stakeholders are considered in Board
discussions and decision-making as required
by the UK Corporate Governance Code
and, whilst as a Gibraltar company, the UK
Companies Act 2006 does not apply to the
Company, the matters set out in section
172 are taken into account by the Board in
its decision-making to the extent permitted
under Gibraltar law.
AGM 2023
All resolutions proposed at the AGM in May
2023 were overwhelmingly supported with
at least 91% of total votes cast in favour. The
next AGM will be held on 13 May 2024 and
the majority of Board members will attend
the meeting and be available to answer
questions.
Directors’ insurance cover
The Company has arranged and
maintains, at its expense, a directors’
and officers’ liability insurance policy in
respect of legal actions against its Directors,
as recommended by the UK Corporate
Governance Code. To the extent permitted
by Gibraltar law, the Company may
also indemnify the Directors. Neither the
insurance nor the indemnity provides cover
where a Director has acted fraudulently or
dishonestly.
Development and advice
The Chair regularly agrees and reviews
each Director’s training and development
needs. Members of the Board committees
receive specific updates on matters that
are relevant to their role. Members of the
Executive Committee with responsibility
for the Group’s business make periodic
presentations at Board meetings about their
functions, performance, markets
and strategy.
Information and support
All Directors have access to the advice and
services of the Company Secretary* and
the Company’s nominated advisers, who
are responsible for ensuring that Board
procedures are followed.
* References in this Annual Report to Company
Secretary refer to Elizabeth Bisby and for
Gibraltar corporate purposes Straits Secretaries
(Gibraltar) Limited.
Directors are able to seek independent
professional advice, if required, at the
Company’s expense provided that they have
first notified the Company of their intention
to do so.
Under the direction of the Chair, the
Company Secretary’s responsibilities
include ensuring information flows within
and between the Board, its committees and
the executive team, as well as facilitating
induction, evaluation and professional
development activities, and advising the
Board on corporate governance, legal and
procedural matters.
Conflicts of interest
Conflicts of interest of the Directors are dealt
with in accordance with the procedures set
out in the Articles and are monitored by the
Chair.
Specifically, a Director does not vote on
Board or Committee resolutions in which
they or persons connected with them
have an interest (other than by virtue of
a shareholding in the Company) which
is to their knowledge material, except in
specific limited circumstances. The Board
is confident that the appropriate checks
and balances are in place to identify and
minimise potential conflicts of interest.
Gaming Compliance Committee
In accordance with Nevada Gaming
Control Board requirements, the Board
has appointed a Gaming Compliance
Committee. Its members during 2023 were
Mark Summerfield and Yariv Dafna, in
addition to an external leading Nevada
lawyer, Michael Alonso, who chairs the
Committee. Ori Shaked was appointed
to the Committee following Yariv Dafna
stepping down from the Board in October
2023. The CFO and CRO have a standing
invitation to attend, and the meetings are
managed by the US Compliance Director.
During the year, the Committee was
formalised as a sub-committee of the Board.
Governance processes have been improved
and the reporting has been aligned with the
Compliance Plan. The Committee’s terms of
reference were approved by the Board and
are available on the Company’s website.
The Gaming Compliance Committee is
entrusted with making sure that the Group’s
licensed gaming activity is carried out with
honesty and integrity, in accordance with
high moral, legal and ethical standards, and
free from criminal and corruptive elements.
As such, the Committee is responsible and
has the power to identify and evaluate
situations arising in the course of the
Company’s and its affiliates’ business that
may adversely affect the objectives of
gaming control.
The Committee is not intended to displace
the Board or the Company’s executive
officers with decision-making authority but
is intended to serve as an advisory body to
better ensure achievement of the Company’s
goals of avoiding unsuitable situations and
in entering into relationships exclusively with
suitable persons.
The Committee’s work is done independently
and impartially. To this end, its members
are appointed by and report directly to the
Board of Directors.
Other disclosures
The following matters are not applicable
to the Group and therefore have not been
included in this report:
By applicable sub-paragraph within LR 9.8.4
(1)
Interest capitalised by the Group
(2) Publication of unaudited financial
information
(3) Details of long-term incentive
schemes only involving a Director
(4) Waiver of emoluments by a Director
(5) Waiver of future emoluments by a
Director
(6) Non pro-rata allotments for cash
(issuer)
(7) Non pro-rata allotments for cash by
major subsidiaries
(8) Parent participation in a placing by a
listed subsidiary
(9) Contracts of significance
(10) Provision of services by a controlling
shareholder
(11) Shareholder waivers of dividends
(12) Shareholder waivers of future
dividends
(13) Agreements with controlling
shareholders
On behalf of the Board:
LORD MENDELSOHN
Chair
26 March 2024
51
ANNUAL REPORT & ACCOUNTS 2023 STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SUPPLEMENTARY INFORMATION
NOMINATIONS COMMITTEE
DEAR SHAREHOLDER
On behalf of the Board, I am pleased to
present the Nominations Committee report
for the year to 31 December 2023. The
Committee has been busy this year with the
selection and onboarding of the new CEO
and CFO who bring the required skills and
experience to enhance the Board’s strategic
approach and decision-making. The
Committee has also reviewed the changes
to the Group’s Executive Committee following
the arrival of Per Widerström.
The Nominations Committee, as a sub-
committee of the Board of Directors, is
responsible for monitoring the composition
and diversity of the Board, overseeing
the process of selecting and nominating
Directors, ensuring they receive an
appropriate induction and determining
succession plans for the Chair, CEO
and other key roles. The Nominations
Committee’s terms of reference are available
on the Company’s website.
In 2023 the Nominations Committee
was comprised of myself as Chair, and
Mark Summerfield, who stepped down in
September, Ori Shaked, Limor Ganot, who
joined in September, and Lord Mendelsohn,
who joined in October.
Succession planning
The Committee regularly reviews succession
plans for the Board, including the structure,
composition and skills required to support
the Group’s strategy. The Committee also
considers succession planning for the
Executive Committee and other key roles
within the senior leadership team, as well
as initiatives underway to develop talent
internally.
At both Board and Executive level, 2023
was a year of significant change with the
strengthening of the Executive Committee
made up of senior leaders from the Group,
together with new recruits. The Executive
Committee continues to play a key role in
the ongoing integration of 888 and William
Hill and will provide strong leadership across
the business in delivering on our strategic
initiatives in line with our value creation plan.
Following the announcement in January
2023 that Itai Pazner was leaving the
business, he was immediately succeeded
by Lord Mendelsohn as Executive Chair
to ensure continuity of leadership. The
Nominations Committee led the search
for a new CEO, and following an extensive
search assisted by executive search firm
Russell Reynolds, the Board appointed Per
Widerström who the Board believes has the
skills and experience required to lead the
combined Group.
Following Per’s appointment, Lord
Mendelsohn’s independence was assessed,
and the Board was satisfied that Lord
Mendelsohn would be capable of continuing
his chairmanship independently. Following
consultation with the Board, the Nominations
Committee also renewed Lord Mendelsohn’s
appointment as Chair for an additional
three-year term from April 2024 (subject
to annual re-election by shareholders at
the AGM).
The Committee, assisted by Korn Ferry, also
led the recruitment of Sean Wilkins, our new
CFO who replaced Yariv Dafna and joined
the business in February 2024.
Upon joining, Executive Directors are
immersed in the Company’s operations
immediately, and take part in induction
activities such as meeting with leadership
across the business, visiting our offices
around the world and our customer-
facing sites, training and also meeting with
shareholders. The Company Secretary
provides Executive Directors with essential
corporate information including insurance
policies, Group policies, briefing notes,
regulatory compliance and licensing
information, and corporate governance
materials.
Board diversity policy
The Nominations Committee is also
responsible for pursuing diversity within the
scope of its mandate, including setting
measurable objectives and monitoring
progress on achieving such objectives. We
aim to have a Board that is well balanced
and has the appropriate skills, knowledge,
experience and diversity for the needs of
the business without compromising on the
quality or merit of candidates including
their aptitude and ability. In considering
new Board appointments, the Committee
considers diversity in the broadest sense
including diversity of thought, age, gender,
nationality, independence, educational
and professional background, social
and ethnic background, business and
geographic experience in order to create
an appropriate balance.
The Board supports the FTSE Women
Leaders Review and the Parker Review on
Ethnic Diversity. At the financial year end,
the Board comprised four male and three
female directors meaning that over 40% of
the Board was female, with myself as the
Senior Independent Director, which was in
accordance with the targets for diversity in
the Listing Rules. However, the Nominations
Committee will also take this balance into
consideration following the appointment of
Sean Wilkins as CFO in February 2024.
Anne de Kerckhove
Chair of the Nominations Committee
KEY ACTIVITIES 2023
• Leading the search and recruitment of
the Group’s new CEO and CFO including
developing candidate profiles of the skills,
character and experience required.
• Reviewing the composition of the Board
including assessing any gaps in the
balance of skills and experience.
• Ensured the successful onboarding of the
new CEO.
• Assessment and monitoring the
Independence of the Chair during his
transition back to his non-executive role.
• Monitoring the Board evaluation process
which is described on page 50.
• Implementing the Board’s diversity policy
which is described on page 52 (including
monitoring the gender balance of senior
executives and their direct reports).
• Supporting the development of a
diverse pipeline of candidates for senior
management.
MEMBERSHIP IN 2023
Anne de Kerckhove (Chair)
Mark Summerfield
(until 26 Sept)
MEETING
ATTENDANCE
2/2
2/2
Ori Shaked and Limor Ganot were appointed
from 26 September and Lord Mendelsohn
from 16 October. Although the regular
scheduled Nominations Committee meetings
were held earlier in the year before the
changes to committee composition, the
new members of the Committee have been
heavily involved in the recruitment and
selection of the CEO and CFO and there
have been many supplementary meetings of
the Committee in the year. Mr Shaked was
also the Board appointed representative for
all CEO interviews.
52
888 HOLDINGS PLC The geographic diversity of the Board is
representative of the operational centres of
the Group and includes directors with British,
Israeli and European backgrounds. However,
the Board is also cognisant of the Parker
Review recommendations regarding ethnic
diversity and had at least one director from
an ethnic minority background on the Board
for the majority of 2023. It will also take
these considerations into account in our
future appointments, to continue to improve
diversity on both the Board and in the senior
leadership of the Group.
Details of the Company’s diversity
position and involvement of women in
management of the Group are set out in
the Supplementary Data on pages 176 and
177. The Company is committed to making
progress towards improving the diversity
in senior leadership roles (defined as the
Executive Committee and their direct
reports) and has set targets for increasing
representation by 2027.
Commitment
The terms of appointment for each Non-
Executive Director, including expected time
commitment, are available for inspection
at the Company’s registered office during
normal business hours and at the AGM.
Non-Executive Directors are required
to allocate sufficient time to perform all
applicable roles and to both disclose any
external appointments and consult with the
Company prior to accepting any new major
external appointments. It is the Committee’s
view that all Directors have allocated
sufficient time to fulfil their commitment
and to meet their Board obligations and
responsibilities. In addition to the regular
scheduled Board meetings, the Board
has dedicated a significant amount of
time this year for supplementary meetings
when required to make important strategic
decisions and provide support to the
Executive Chair.
Re-election and appointment of Directors
The effectiveness and commitment of each
of the Non-Executive Directors is reviewed by
the Committee annually.
The Committee has satisfied itself as to
the individual skills, relevant experience,
contributions and time commitment of all
the Non-Executive Directors, taking into
account their other offices and interests
held. The Board is recommending the
election or re-election to office of all
Directors at the 2024 AGM.
ANNE DE KERCKHOVE
Chair of the Nominations Committee
26 March 2024
53
ANNUAL REPORT & ACCOUNTS 2023 STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SUPPLEMENTARY INFORMATION
ESG COMMITTEE
There has been increased communication
with colleagues to keep them updated on
business changes and regular anonymous
eNPS surveys to allow ongoing feedback
and temperature checks on employee
sentiment. The results of this are shared with
the Committee and Board. Furthermore,
since Per Widerström’s arrival, he has held
regular town halls to update the workforce
on progress against his 100-day plan, where
employees can ask questions directly to the
Executive Committee. Further details are set
out on pages 14 and 23.
Climate change and the environment
The Committee recognises the importance
of minimising the business’ environmental
footprint. In comparison to other sectors
the Group’s impact on the environment
is relatively low as our product is largely
digital. The Group has a ‘C’ CDP rating
and continues to retain membership of
the FTSE4GOOD index. The William Hill
business is now certified as carbon neutral,
an achievement we are very proud of
considering the size of our large retail estate.
Our carbon reduction plan for the combined
Group continues to progress against plan,
however with no renewable energy available
in Israel we are focusing on reduction.
Further details are included in the ESG and
Sustainability section on pages 10 to 21.
The coming year
Sustainability in all three pillars of the
Group’s ESG model is key to the success
of the Company. During the first meeting
of 2024, the Committee reviewed and
approved the ESG Strategic Framework and
its alignment with the UN’s 17 Sustainable
Development Goals and agreed specific
objectives for each pillar. Player safety
globally will continue to focus on reducing
harm using technology and raising
awareness by partnering with relevant
charitable organisations. We will continue
to engage with our workforce and wider
stakeholders to ensure that the combined
Group remains an inclusive environment
where our colleagues thrive. We aim to
protect the environment by becoming a net
zero business. Further details are included in
the ESG and Sustainability section on pages
10 to 21.
ANNE DE KERCKHOVE
Chair of the ESG Committee
26 March 2024
DEAR SHAREHOLDER
On behalf of the Board, I am pleased to
present the ESG Committee report for the
year to 31 December 2023.
During this period the Committee was
chaired by Andria Vidler, who stepped down
from the Board in September 2023.
I would like to thank her for her expertise
and valuable insight.
Membership
The ESG Committee is composed of three
Non-Executive Directors, with other Board
members including the Chair, CEO, and CFO
invited to attend the Committee meetings.
The Chief Strategy Officer and Chief Risk
Officer also attend the meetings and provide
operational updates to the Committee. The
Group also has an ESG and Sustainability
Director who has executive responsibility for
the Group’s ESG strategy. The Committee
is responsible for reviewing the Group’s
ESG strategy and setting relevant KPIs,
developing and reviewing relevant policies
and practices and providing oversight of
the implementation of these plans. A clear
ESG governance framework is in place for
how ESG matters are escalated to and
delegated from the ESG Committee. This
framework can be found on page 164.
In 2023, Lord Mendelsohn, in his capacity
as Executive Chair, was the executive
responsible for monitoring ESG activity
and progress within the Group, with this
responsibility being returned to the CEO with
Per Widerström’s arrival in October 2023.
Safer gambling
Safer gambling remains a key focus for
the Committee and Player Safety is a core
pillar of our ESG framework. The Committee
received regular updates on safer gambling
and related matters, with a particular focus
on developing a global player protection
strategy, which included developing a
minimum safer gambling standard for all of
the Group’s brands.
As part of the global initiative, internal
communications and training were refreshed,
including a session on safer gambling
with the Board in May 2023 that provided
detailed education on gambling harms.
Workforce engagement
I continue to be the Non-Executive Director
designated as the workforce engagement
representative. The acquisition of William
Hill by 888 continued to impact employees
during 2023. The combination of two
corporate cultures, together with changes
to headcount and location of colleagues,
continued to challenge the Board to listen
to and understand the views, interests and
concerns of the workforce and take these
into consideration prior to making decisions.
Anne de Kerckhove
Chair of the ESG Committee
KEY ACTIVITIES 2023
• Received progress updates on KPIs
including on safer gambling, people and
the environment.
• Reviewed progress against the carbon
reduction plan.
• Reviewed progress against the global
player safety initiative.
• Reviewed scores by rating agencies and
plans for improvement.
• Reviewed and considered the climate-
related scenario analysis report, see page
163 to 175.
• Reviewed and approved the Committee
terms of reference, which are available on
the Group’s website.
MEMBERSHIP IN 2023
Andria Vidler
(until 26 September)
Anne de Kerckhove
(Chair from 26 September)
Mark Summerfield
Ori Shaked
(from 26 September)
MEETING
ATTENDANCE
2/2
2/2
2/2
0/0
54
888 HOLDINGS PLC 55
ANNUAL REPORT & ACCOUNTS 2023 STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SUPPLEMENTARY INFORMATION
AUDIT & RISK COMMITTEE
DEAR SHAREHOLDER
On behalf of the Board, I am pleased to
present the Audit & Risk Committee report
for the financial year ended 31 December
2023. This has been a transitional year
with the post-acquisition integration of the
William Hill business being the strategic
priority for the Group. The Committee’s
primary functions included assessing
the integrity of the Company’s financial
statements, maintaining an appropriate
relationship with and reviewing the
independence and effectiveness of the
Company’s external auditor, and overseeing
the Company’s system of internal controls
and risk management.
In this letter I explain to shareholders
the responsibilities of the Committee,
highlighting those of particular importance
this year. The pages following contain more
detail on the matters considered.
During the year the business has worked
particularly hard on developing and
articulating the Group’s Enterprise Risk
Management Framework and Risk Appetite
Statement. Given the Group’s renewed focus
on risk and risk management, the Board
resolved to formally delegate the oversight
of risk and systems of risk management
to the Audit Committee. The Committee’s
terms of reference were amended and
adopted accordingly and on 16 October
2023 the Committee became the Audit &
Risk Committee. The Audit & Risk Committee
has continued to carry out a key role
within the Group’s governance framework,
supporting the Board in monitoring and
reviewing the systems for risk management,
internal control and financial reporting. The
Committee continues to be responsible for
oversight of significant financial matters,
including the Company's tax policies,
planning and compliance, treasury policies,
as well as other significant financial matters
that the Board deems appropriate from time
to time.
While the Board remains accountable for
risk management, the Committee has taken
responsibility for working closely with Group
management to ensure that significant
risks are considered on an ongoing basis
and that appropriate responsibilities and
accountabilities for the related controls
have been set. Extensive work has been
undertaken to develop an Enterprise Risk
Management Framework including a risk
taxonomy and a governance framework
for both Committee and Board escalation.
The Committee is responsible for apprising
the Board of pertinent matters and making
recommendations based on its activities
and findings at Committee meetings.
An associated Committee responsibility is to
review the scope, nature and effectiveness
of the work of the Internal Audit team, as well
as ensuring that the business responds to
the recommendations made.
At the request of the Board, the Committee
reviewed this Annual Report and advised
it considers sufficient information has
been provided to give shareholders a fair,
balanced and understandable account
of the business and allow them to assess
its position and performance, business
model and strategy. It also assessed the
Group’s viability, in line with the Code
requirements, prior to reporting to the Board
and recommending the Annual Report for
approval. Further, the Committee ensured
that the financial performance aspects of
all communications with shareholders were
carefully considered.
This was the first full year Internal Audit
work was completed for the combined
Group by our in-house internal audit team,
with additional support provided by our
co-source partner Deloitte. The scope of
Internal Audit’s plans was agreed with both
management and the Committee to support
the Board in considering the effectiveness
of controls over significant risks disclosed
in these accounts. The 2023 internal audit
plan was approved by the Committee in
2022 and during an evolving year for the
combined Group, changes to the original
audit plan were communicated and
approved by the Audit & Risk Committee
accordingly.
More information on the Internal Audit
reports in 2023 can be found on page 60.
The Committee monitors and reviews
the effectiveness and key aspects of the
external audit process, including the annual
audit plan and audit findings, as well as the
auditors’ independence and objectivity.
It also recommends the audit fee to the
Board and sets the Company’s policy on
the provision of non-audit services by the
external auditor. EY UK is the auditor for
the purposes of the Company preparing
financial statements as required pursuant
to the UK Listing Rules and the Disclosure
and Transparency Rules. EY Gibraltar is
the Company’s statutory auditor including
for the purposes of issuing an audit report
pursuant to the Gibraltar Companies Act
2014.
We seek to respond to shareholders’
expectations in our reporting and would
welcome feedback. I am available to speak
with shareholders at any time and shall also
be available at the Annual General Meeting
in May 2024 to answer any questions.
MARK SUMMERFIELD
Chair of the Audit & Risk Committee
26 March 2024
Mark Summerfield
Chair of the Audit & Risk Committee
KEY ACTIVITIES 2023
• Continued to support the Board in
monitoring and reviewing the systems for
risk management, internal control and
financial reporting.
• Reviewed the updated risk register and
framework.
• Approved the internal audit plan for the
year and received the internal audit
reports.
• Reviewed and recommended to the Board
for approval the FY22 Annual Report &
Accounts and FY23 interim results.
• Received reports from the external
auditors on key audit findings.
• Reviewed and approved updates to
policies including the Treasury Policy,
Whistleblowing Policy, Anti-Bribery &
Corruption Policy and Business Continuity
Plan.
• Oversaw the continuing improvements
following the UK Gambling Commission
compliance assessments and remedial
actions.
MEMBERSHIP IN 2023
Mark Summerfield (Chair)
Anne de Kerckhove
Limor Ganot
Andrea Gisle Joosen
MEETING
ATTENDANCE
5/5
4/4
4/5
1/1
56
888 HOLDINGS PLC HIGHLIGHTS OF THE COMMITTEE’S WORK DURING THE YEAR:
THE IMPACT OF CHANGES TO
THE LEGAL AND REGULATORY
ENVIRONMENT IN WHICH THE
GROUP OPERATES ON ITS
BUSINESS, SECTOR AND MARKET,
TOGETHER WITH THE GROUP’S
ONGOING ENGAGEMENT WITH
REGULATORY BODIES
THE ASSESSMENT OF THE RISKS
FACING THE BUSINESS
TREASURY
The Committee examined management’s assessment of legal and regulatory risks in key
markets, focusing on any changes in the environment and communication with regulators,
together with the appropriateness of the Group’s response.
The Committee reviewed the risk registers and the Risk Appetite Statement was updated
to ensure that it is an accurate and relevant reflection of the Board’s approach to risk
management. The Committee continues to work with the Chief Risk Officer to embed enhanced
risk management within the Group. Following the implementation of a new framework the
Committee became the Audit & Risk Committee in October 2023.
The integration of 888 and William Hill and the appointment of a new Group Treasurer
prompted a renewed focus on treasury processes, procedures, systems of control, and
resourcing. The Committee received updates on the progress against improvement objectives
set by the Group Treasurer and approved a new Group Treasury Policy in 2023.
REVENUE RECOGNITION
The Committee reviewed and considered the Group’s accounting policies as well as the
application of those policies and the process and control framework and has concluded that
the Group’s recognition of income is appropriate.
INTEGRATION AND EXCEPTIONAL
ITEMS
The Committee reviewed the ongoing integration plans; ensuring the structure and governance
of the programme was appropriate and that controls continue to be maintained throughout
the integration.
The Committee reviewed the treatment of exceptional items, in particular those associated
with the integration programme, and agreed with management’s presentation of costs as
exceptional.
THE VIABILITY STATEMENT AND
GOING CONCERN STATEMENT
PREPARED BY MANAGEMENT
The Committee reviewed management’s analysis of the Company’s going concern and
viability statement, including updated forecasts, downside scenarios including an assessment
of mitigations available to the Group and a reverse stress test, and advised the Board
accordingly. The Board has concluded that the Company has adequate resources to continue
in operational existence for the foreseeable future.
CAPITALISED DEVELOPMENT COSTS
The Committee reviewed management’s assessment of the alignment and enhancement
of controls to ensure consistent application of IAS 38 across the Group.
THE GROUP’S EXPOSURE TO
CORPORATION TAX, GAMING
DUTIES, VAT AND
SIMILAR TAXES
The acquisition of William Hill and the integration of the two businesses allowed the opportunity
for the Committee to review the tax arrangements in place within both businesses and approve
an appropriate tax structure for the Group presented by management. The UK tax strategy
has been agreed and published on our website and the integration has been planned with
global tax considerations a key element.
VALUATION OF ASSETS AND
LIABILITIES
The Committee reviewed the impairment testing of the goodwill acquired on the William Hill
acquisition and concurred with management’s view that there were no impairments of
this goodwill.
THE GROUP’S ANTI-BRIBERY,
ANTI-MONEY LAUNDERING AND
WHISTLEBLOWING OBLIGATIONS
The Committee reviewed the Company’s policies to ensure they remain relevant to the
Company’s business and the regulatory environment in which it operates. The Committee
received updates on the whistleblowing reports made.
57
ANNUAL REPORT & ACCOUNTS 2023 STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SUPPLEMENTARY INFORMATION
AUDIT & RISK COMMITTEE CONTINUED
COMMITTEE COMPOSITION
During 2023, the Committee comprised three
independent Non-Executive Directors, being
Mark Summerfield, Limor Ganot, Andrea
Gisle Joosen who joined the Committee in
September, and Anne de Kerckhove who
stepped down from the Committee at the
same time.
Two members constitute a quorum. The
Committee requires the inclusion of at least
one financially qualified member with recent
and relevant financial experience. The
Committee Chair fulfilled that requirement.
The Committee has competence relevant to
the online gaming sector and all members
of the Committee have an understanding
of financial reporting, the Group’s internal
control environment, relevant corporate
legislation, the functions of internal and
external audit and the regulatory and
compliance framework of the business.
Specifically, Mr Summerfield was both
an auditor and worked within the sector,
Ms de Kerckhove has extensive strategy,
entrepreneurial and sector experience,
and Ms Ganot is both a qualified CPA and
has extensive experience as a venture
capital fund manager. Ms Gisle Joosen
has extensive non-executive and audit
committee experience.
In addition to scheduled meetings, the
Committee Chair met with the Chief
Financial Officer and the internal and
external auditors on several occasions.
Although not members of the Committee,
the Chair of the Board, Chief Executive
Officer, Chief Financial Officer and Chief
Risk Officer attend meetings, together
with representatives from the internal and
external auditors. Function heads and other
members of management are invited to
attend meetings from time to time.
OUR WORK IN 2023
In planning its work, the Committee has
reference to the significant risks that may
have an impact on the financial statements.
During the year there were no matters where
there was significant disagreement between
management, the external auditor and
the Committee, or unresolved issues that
required referring to the Board.
The key matters discussed by the
Committee during the year were as follows:
Legal and regulatory environment
The Group operates within an increasingly
regulated marketplace and is challenged
by regulatory requirements across all
areas of its business. This creates risk for
the Group as non-compliance can lead to
financial penalties, reputational damage
and the loss of licences to operate. As
part of this process, the Board and Audit
& Risk Committee received updates from
management and discussed follow-up
actions in response to regulatory matters
relating to customer activity in prior periods.
The Group manages its regulatory risk
with input from its legal advisers in order
to operate its business in compliance
with relevant regulatory requirements. The
Group works with its lawyers and Chief Risk
Officer to produce regular updates so that
the Board and Audit & Risk Committee
understand what is happening in the
regulatory landscape.
During 2023, the whole Board received
regulatory briefings from the Company’s
lawyers, and the Committee reviewed
updates on the management of regulatory
risk from the Chief Risk Officer, as well
as reviewing the status of litigation and
regulatory reviews involving the Group and
the related accounting for the Group’s
obligations in the financial statements.
Please refer to note 22 of the financial
statements for further detail on Austria and
Germany player litigation specifically.
The Audit & Risk Committee continues to
have a key role working with the Board
in overseeing the Company’s systems of
internal control following the Company’s
response to the UK Gambling Commission
compliance assessments. Although all
remediation actions were executed by
management in response to the Gambling
Commission’s findings, the Group continues
to develop and make improvements to the
Group’s governance framework.
A proactive approach to risk management
was exemplified through the self-
identification and internal escalation of
historic potential AML deficiencies relating
to VIP accounts. Following a thorough
investigation to resolve any historic VIP
account concerns, confirmation was
received from the Gibraltar Gambling
Division on 20 October 2023, stating that
all 'AML and CFT processes, systems
and controls are now considered to be
satisfactory'.
Regulatory mapping
As part of the development of the Group's
enterprise risk management framework,
the Company engaged KPMG to perform
an international risk and control mapping
exercise to help the Company better
understand its regulatory obligations,
the risks faced, and the presence and
adequacy of controls to mitigate them. More
information can be found in the risk report
on pages 30 to 41.
Taxation
The Board oversees and sets the Group’s
tax strategy and evaluates tax risk. In
undertaking this task, the Group’s internal tax
team is supported by external legal and tax
advisers.
During the year, the Group’s Head of Tax
kept the Board and Audit & Risk Committee
apprised of both existing and emerging tax
risks as well as an assessment of the tax
risks across the enlarged Group, in particular
as the organisational design of the Group
continued to evolve.
In 2023, the Board and Audit & Risk
Committee discussed the Group’s tax-
related matters including the Group’s tax
footprint in each territory and its alignment
with value creation. The tax impact of
organisational and operational change
across the business was, and continues to
be, kept under close review. The Committee
noted that the Group registered for taxes
in relevant jurisdictions in order to ensure
timely reporting and payment on the correct
basis, while reserving its position concerning
contesting possible existence of a liability in
appropriate cases. For further information,
see notes 9 and 26 to the financial
statements.
Goodwill and impairment reviews
As set out in note 12 to the consolidated
financial statements, the Group has
significant goodwill and other intangible
assets identified on acquisition relating to
the acquisition of William Hill.
The Committee reviewed the cash flow
forecasts supporting the carrying value
of goodwill and other intangible assets,
including the key assumptions and estimates
as well as the impact of the recent and
potential regulatory developments and
the impact of the external economic
environment on discount rates. There
were no impairments noted relating to the
goodwill recognised in the current year.
The Committee reviewed whether there
were other triggers for impairment across
the remainder of the Group. No impairment
indicators were noted, and there were no
indicators suggesting a need for impairment
reversal.
58
888 HOLDINGS PLC Revenue recognition and development
costs capitalisation
Revenue recognition and the capitalisation
of development costs are areas of material
risk in relation to the preparation of the
financial statements. The Committee has
considered the Group’s accounting policies
in these areas as well as the application
of those policies and the process and
control framework and has concluded
that the Group’s recognition of income
and capitalisation of development costs is
appropriate.
IT systems
The Group’s IT systems are complex, and
the majority of customer-facing systems
are predominantly developed in-house.
The integration of corporate IT systems
between 888 and William Hill is progressing
well with the successful migration of the
two separate operating systems on to one
tenant. The success of the business relies
on the development of IT platforms that
are innovative and appealing to customers.
In addition, the integrity and security of
the IT systems are vital from a commercial
standpoint as well as to ensuring a robust
control environment. The 888 and William
Hill businesses operate on different ERP
finance systems. As part of the ongoing
integration of 888 and William Hill post-
acquisition, a project was launched to
align the ERP systems of both businesses.
Using a best practice approach, it was
agreed that the project would draw on the
expertise of the business to also integrate
improved automation and connectivity with
other business platforms as part of the new
system. The Committee has considered this
within the context of the preparation of the
financial statements and notes the transition
onto one ERP finance system as part of the
integration programme is progressing.
The Audit & Risk Committee oversaw internal
audit’s continuing review of the Group’s
cyber incident response capability and as
an outcome of this process the Company’s
ISO 14001 accreditation was maintained in
2023.
Internal controls and risk management
The Board has overall responsibility for
ensuring that the Group maintains a sound
system of internal control. There are inherent
limitations in any system of internal control
and no system can provide absolute
assurance against material misstatements,
loss or failure. Equally, no system can
guarantee elimination of the risk of failure
to meet the objectives of the business.
Against this background, the Committee
has, together with the Board, developed
and maintained an approach to risk
management that incorporates risk appetite
and tolerance, the framework within which
risk is managed and the responsibility and
procedures pertaining to application of the
policy.
Enterprise Risk Management Framework
The Group’s Enterprise Risk Management
Framework is an infrastructure divided into
five distinct categories
1. Risk Governance;
2. Risk Accountability;
3. Risk Strategy;
4. Risk Appetite; and
5. Risk Culture.
The risk management governance
framework is in place to oversee and
manage all business activities, and it aligns
risk strategy with the Group’s overall goals
and objectives. The Group’s approach to risk
is underpinned by a defined set of principles
to guide and direct risk appetite, which have
been agreed by the Board. During the year,
the Board Risk Appetite Statement was
redefined and is accompanied by key risk
indicators and clear tolerance thresholds.
The Committee assessed the key priorities
for 2024 and believes that they promote a
strong risk culture which ensures the Group’s
operations remain sustainable.
The Group is proactive in ensuring that
corporate and operational risks are
identified, assessed and managed by
identifying suitable controls. A corporate
risk register is maintained by the Chief Risk
Officer.
A description of the principal risks is set out
in the Risk Report on pages 36 to 41.
The Board, supported by the Audit & Risk
Committee, has confirmed that it has
carried out a robust assessment of the
principal risks facing the Group, including
those which threaten its business model,
future performance, solvency or liquidity.
In addition to the matters above, the work of
the Committee during the year included:
• Reviewing the draft interim and annual
reports and considering:
1. The accounting principles, policies and
practices adopted and the adequacy
of related disclosures in the reports;
2. The significant accounting issues,
estimates and judgements of
management in relation to financial
reporting;
3. Whether any significant adjustments
were required arising from the audit;
4. Compliance with statutory tax
obligations and the Company’s tax
policy;
5. Whether the information set out in
the Strategic Report was balanced,
comprehensive, clear and concise and
covered both positive and negative
aspects of performance; and
6. Whether the use of 'alternative
performance measures' obscured IFRS
measures.
• Meeting with internal and external
auditors, both with and in the absence of
the Executive Directors.
• Reporting to the Board on how it has
discharged its responsibilities.
• Making recommendations to the Board in
respect of its findings in respect of all of
the above matters.
• Review and approval of the external audit
fee.
• Oversight of the audit tender process.
The Board considers that the processes
undertaken by the Audit & Risk Committee
continue to be appropriately robust and
effective and in compliance with the
guidance issued by the FRC.
The Committee believes that appropriate
internal controls are in place throughout the
Group. A new Target Operating Model has
been developed to ensure that there are
clear lines of responsibility, and the most
effective control processes are in place
across both businesses. The Committee also
believes that the Company complies with
the FRC Guidance on Risk Management,
Internal Control and Related Financial and
Business Reporting.
59
ANNUAL REPORT & ACCOUNTS 2023 STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SUPPLEMENTARY INFORMATION
AUDIT & RISK COMMITTEE CONTINUED
PERFORMANCE OF AUDIT & RISK
COMMITTEE
The Audit & Risk Committee’s performance
was evaluated as part of the external Board
evaluation in 2023 as detailed on page 50.
The overall conclusion of the review was
that the Committee remains effective in
discharging its functions and reporting to
the Board and the recommended change to
include Risk within the Committee’s area of
responsibility has been completed.
INTERNAL AUDITORS
The Internal Audit team provides
independent assurance over the Group’s risk
management and internal control processes
to the Board via the Audit & Risk Committee.
The Audit & Risk Committee reviewed
and monitored the internal audit plan in
accordance with the principal risks to the
business. The Committee reviewed reports
from the in-house Internal Audit team in
relation to all internal audit work carried out
during the year and monitored responses
and follow ups by management to internal
audit findings. During 2023, the Committee
received reports on:
• UK AML
• GAMSTOP 888
• Delivering compliance for new technology
• Cyber security
• 888 UKGC Action Plan
• Graph QL
• Ad-hoc investigations
The 2024 risk-based audit programme
was reviewed and approved by the Audit
& Risk Committee in January 2024. Any
changes to this agreed audit programme
will be communicated to the Audit & Risk
Committee and will require its approval.
• The Group’s Finance department,
Director of Investor Relations, Company
Secretary and legal advisers initiate the
process in coordination with the Group’s
public relations advisers, focusing on
main themes and financial trends which
primarily inform the Chair’s Statement,
Strategic Report and Business & Financial
Review. The draft statements are then
reviewed, and comments provided by
Group senior management. Input was
also provided by the Company’s Risk
team, Reward team and remuneration
and ESG consultants.
• The Group’s Company Secretary leads
the process of compiling the relevant legal
and corporate governance sections, and
obtains input from Group legal advisers,
senior management and Board members
as required.
• The Group’s Risk team drafts the risk
report supported by legal advice received
by the Group and developments in
relevant risks and risk discussions held by
the Board.
• The Group’s Reward team drafts
the Directors' Remuneration Report
(including the Remuneration Policy)
which is then reviewed by the Group’s
remuneration advisers and the
Remuneration Committee.
• The Group’s Finance department prepares
the accounts. These are audited by the
Company’s auditors, who check amongst
other matters that the Group has given
appropriate attention to any relevant
changes in accounting policies.
• The Group’s CFO, Group Financial
Controller and Director of Investor
Relations review the entire Annual Report
& Accounts and lead an iterative process
pursuant to which the relevant internal and
external stakeholders review and provide
comments.
• The draft Annual Report & Accounts
is presented to the Committee, which
is also in possession of a detailed
report from the external auditor, where
a detailed discussion is held regarding
key disclosures and the Committee’s
recommendations are provided to
the Board.
• The Annual Report & Accounts is finally
reviewed by the full Board for approval.
• Adequate time is given to each of
the above steps to allow for full and
meaningful review.
GOING CONCERN AND FINANCIAL
VIABILITY
During 2023, the Committee reviewed the
appropriateness of adopting the going
concern basis of accounting in preparing
the full year financial statements, and
assessed whether the business was viable
in accordance with the Code. As part of
the assessment, the Committee closely
scrutinised the Group’s major risks, both
individually and how they might occur in
combination, their financial impact, how
they are managed, the availability of finance
and the appropriate period for assessment.
This included detailed modelling of the
Company’s assumptions underlying its
forecast.
In its going concern assessment, the
Directors have considered a range of
plausible downside scenarios as well as
considering separate reverse stress tests.
It has also considered the further actions
available to the Group to conserve cash
to mitigate the impact of any severe but
plausible downside scenarios occurring.
The Committee challenged the identification
of these scenarios linked to significant risks
and the assumptions comprising the viability
analysis carried out by management and
deemed appropriate the going concern
basis of accounting and disclosure around
both going concern and the viability
statement. The Group’s viability statement is
on page 42.
FAIR, BALANCED AND UNDERSTANDABLE
The Committee considered whether the
2023 Annual Report is fair, balanced and
understandable, and whether it provides the
necessary information to shareholders to
assess the Group’s performance, business
model and strategy. The Committee
considered management’s assessment of
items included in the financial statements
and the prominence given to them and
ensured it followed a framework which
supports the inclusion of key messaging,
market and segment reviews, performance
overviews, principal risks and other
governance disclosures. The Committee
also ensured that sufficient forward-looking
information was provided, and a balance
made between describing potential
challenges and opportunities.
The Committee and subsequently the
Board are satisfied that, taken as a whole,
the 2023 Annual Report & Accounts are
fair, balanced and understandable. The
Committee ensured the steps undertaken
by management were performed such that
the Annual Report & Accounts remain fair,
balanced and understandable including the
following processes:
60
888 HOLDINGS PLC Following a rigorous tender process
with two bidding firms, the Selection
Committee recommended that EY
remain as the Company’s auditors. In
August 2023 the Audit & Risk Committee
accepted the proposal and made a formal
recommendation which was approved by
the Board and the re-appointment of EY will
be put to shareholders at the 2024 AGM.
The Committee notes and confirms
compliance with the other provisions of the
Competition & Markets Authority Order 2014
in respect of statutory audit services for
large companies.
AUDIT AND NON-AUDIT WORK
The Audit & Risk Committee remains
mindful of the attitude investors have to
auditors performing non-audit services. The
Committee has clear policies relating to the
auditors undertaking non-audit work and
monitors and approves the appointment of
the auditors for any non-audit work involving
fees above £25k, with a view to ensuring that
non-audit work does not compromise the
auditors’ objectiveness and independence.
The Committee is committed to ensuring
that fees for non-audit services performed
by the auditors will not exceed 70% of
aggregate audit fees measured over a
three-year period.
Fees payable to the auditor for audit and
non-audit services are set out in note 5 to
the financial statements on page 120.
EXTERNAL AUDITORS
EY has been the Company’s external
auditor since appointment in 2014 and
re-appointment in 2023. The partners
responsible for the external audit are
Dale Cruz, a partner in EY’s Gibraltar
office, and Marcus Butler, a partner in EY’s
London office. Dale and Marcus have been
responsible for 888’s audit since 2023 and
2021 respectively.
The Committee has reviewed the
performance of EY in relation to the
Group audit, a process which involved
all Board members and senior members
of the Group’s Finance function. Specific
consideration was given to:
• Ensuring that safeguards put in place by
the auditor against independence threats
are sufficient and comprehensive;
• Ensuring that the quality and
transparency of communications from the
external auditors are timely, clear, concise
and relevant and that any suggestions
for improvements or changes are
constructive;
• Determining whether they had exercised
professional scepticism, with regards
to the reliability of evidence provided,
the appropriateness and accuracy of
management responses to questions,
considering potential fraud and the
need for additional procedures and the
willingness of the auditor to challenge
management assumptions; and
• Considering whether the quality of the
audit engagement team is sufficient and
appropriate — including the continuity of
appropriate industry, sector and technical
expertise.
Feedback is provided to the external auditor
by the Audit & Risk Committee through one-
to-one discussions between the Chair of the
Audit & Risk Committee and the audit firm
partner. Each year, the results of the review
of the EY audit practice by the regulator are
discussed with the audit team to determine
the relevance to the Group’s audit and how
the team needs to respond.
The conclusions reached by the Committee
were that EY had performed the external
audit in a professional manner, and it was
therefore the Committee’s recommendation
that the reappointment of EY be proposed
to shareholders at the Annual General
Meeting to be held in May 2024.
The Committee reviewed the reports
prepared by the external auditors
on key audit findings and any
significant deficiencies in the financial
control environment, as well as the
recommendations made by EY to
improve processes and controls together
with management’s responses to those
recommendations. EY highlighted a
small number of specific internal control
weaknesses and management committed to
making appropriate changes to controls in
the areas highlighted by EY.
AUDIT TENDER
During the year, the Company undertook
an audit tender exercise. The audit contract
was last tendered for the year ended
31 December 2014 and no contractual
obligations existed that acted to restrict the
Audit & Risk Committee’s choice of external
auditors. Under the EU Audit Regulation
and the Competition and Markets Authority
'The Statutory Audit Services for Large
Companies Market Investigation (Mandatory
Use of Competitive Tender Processes and
Audit Committee Responsibilities)' Order
2014, the Company was required to run
a competitive tender process in respect
of auditor appointment no later than 31
December 2023.
The Audit & Risk Committee led the audit
tender process, which included the approval
of the plan for the audit tender, late in 2022,
nominating a Selection Committee led by
the Chair of the Audit & Risk Committee and
comprised another non-executive director,
the CFO, and the Group Financial Controller.
The tender process included two bidding
firms and involved the setup of a data room;
a formal process for submitting requests
and queries for further information and
a range of meetings with the Board and
senior management including a number of
meetings with the Chair of the Audit & Risk
Committee as well as meetings with the
Executive Chairman and a Non-Executive
Director. Both bidding firms were given
access to the same members of the Board
and management and the same data
across the tendering process.
The Selection Committee was responsible
for ensuring that transparent and non-
discriminatory selection methods were
effectively applied when evaluating the
audit proposals. The Selection Committee
used criteria including strength of team;
understanding of industry and business;
audit quality; and technical expertise
and value for money in order to inform its
decision.
61
ANNUAL REPORT & ACCOUNTS 2023 STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SUPPLEMENTARY INFORMATION
REMUNERATION COMMITTEE
DEAR SHAREHOLDER,
REMUNERATION OUTCOMES FOR 2023
2023 was a year of transition for our
executive leadership team and our bonus
arrangements were structured taking this
into account.
As explained in last year’s Remuneration
Report, our former CFO, Mr Dafna, remained
with the business on the departure of our
former CEO, Mr Pazner, and was entitled to
a bonus for 2023 of up to 150% of salary,
based 60% on Group operational targets
(revenue, EBITDA, EBITDA margin, regulatory
compliance and an ESG scorecard with 50%
safer gambling, 25% environmental and 25%
employee engagement) and 40% on key
integration objectives (40% operational cash
flow and the remainder integration priorities).
The maximum bonus opportunity for our new
CEO, Mr Widerström, was 150% of salary pro-
rated to his appointment to the Board on 16
October 2023. His annual bonus was based
solely on the Group operational element of
the bonus, reflecting him joining the Board in
the last quarter of the year.
While there was strong performance
against the regulatory compliance and
ESG scorecard elements of the Group
operational bonus metrics, the targets
for the financial metrics were not achieved.
For 2023 a hurdle mechanism was in place
such that no bonus would be payable if
performance against the adjusted EBITDA
metric was below 90% of target, irrespective
of performance against other operational
targets. This hurdle threshold was not met
and as a result, the Committee agreed
that no bonus would be payable in respect
of any of the Group operational targets.
Therefore, no bonus is payable to our CEO
for 2023.
For our former CFO, Mr Dafna, there was
no bonus paid for the Group operational
element which accounted for 60% of his
total bonus. However, there was strong
performance achieved against the 40% of
the bonus based on operational cash flow
and our integration priorities of restructuring
and effective leadership of the finance
team and effective contribution to, and
management of, the integration programme.
I am pleased to present the Directors’
Remuneration Report for the year ended
31 December 2023, my first as Chair of the
Remuneration Committee following my
appointment in May 2023, succeeding Anne
de Kerckhove, who remains a member of the
Committee. This report sets out:
• my statement on the activities and
decisions of the Remuneration Committee
during the year;
• the new Directors’ Remuneration Policy
which will be put to shareholder vote at
our AGM on 13 May 2024; and
• the Annual Report on Remuneration, which
explains how the Directors’ Remuneration
Policy was implemented in 2023 and
how the new policy will be implemented
in 2024.
As a company incorporated in Gibraltar,
888 Holdings Plc is not bound by UK law
or regulation in the area of directors’
remuneration to the same extent that it
applies to UK incorporated companies.
However, by virtue of 888’s Premium Listing
on the London Stock Exchange and
reflecting the Committee’s approach to
good governance and investor expectation,
we have prepared this report in line with the
requirements of the Directors’ Remuneration
Reporting regulations.
OVERVIEW OF 2023
2023 has been another year of change for
the Group.
We were delighted to welcome Per
Widerström as our new Chief Executive
Officer on 16 October 2023 and Sean
Wilkins as our new Chief Financial Officer
on 1 February 2024. We are confident that
our new executive team have the right skills
and capability to lead the Group through
our recovery plan and deliver the Group's
strategic value creation plan. These factors
have shaped the Executive Directors’
remuneration packages for the year ahead
as set out later in my letter.
Whilst financial performance has been
disappointing, the Group has made
significant and ongoing improvements to
the sustainability and quality of the mix of
the business in addition to strong double
digit active customer growth providing
strong foundations for our recovery and
growth plans. This has been the context
in which the Committee has reviewed
remuneration outcomes for the year and
considered metrics and target setting for
the year ahead.
Andrea Gisle Joosen
Chair of the Remuneration Committee
MEMBERSHIP IN 2023
Andrea Gisle Joosen
(Chair from 23 May)
Anne de Kerckhove
Limor Ganot
Mark Summerfield
(until 26 September)
MEETING
ATTENDANCE
1/2
4/4
3/4
2/2
62
888 HOLDINGS PLC In determining the performance against
the integration element, the Committee
noted the successful execution of synergies
during 2023, including the transformation
of the Group’s finance function achieving
a significant reduction in cost while
maintaining engagement. Operational cash
flow has been appropriately controlled with
no use of retained cash flow throughout
the year, a critical target for the Board
to ensure sufficient capital is available
for investment in growth. Integration and
transformation costs have also been
kept well within budget, further freeing
up capital. As a result, the integration
objectives have been assessed to be met
in full. The Committee considered whether
this outcome was appropriate taking
into account the crucial role the CFO has
played in 2023, during a year of instability
with significant headwinds, to integrate the
business following the acquisition of the
non-US William Hill business in 2022 and
deliver synergies and cost savings across
the Group. The CFO’s contributions during
2023 have been significant in setting the
foundation for future long-term sustainable
growth and profitability for the Group. Taking
these matters into account the Committee
concluded that it was appropriate that Mr
Dafna should receive the formulaic outcome
of this part of the bonus noting that there
was no payment under the Group objective
element. As a result, Mr Dafna will receive
a bonus payment of 40% of the maximum
bonus opportunity. While Mr Dafna stood
down from the Board on 2 October 2023,
he remained an employee working within
the business until 31 December 2023 and
there is therefore no bonus pro-ration.
The LTIP award granted in 2021 was
based 50% on relative TSR performance
and 50% on adjusted EPS performance
measured over three financial years to
31 December 2023. As disclosed in last
year’s Remuneration Report, the base EPS
for this award was rebased to reflect the
performance of the combined business
following the acquisition, and no changes
were made to the performance target range
of 3% to 9% CAGR. As a result of adjusted
EPS of 10.7p and TSR performance below
threshold against the sector peer group, the
award granted to Mr Dafna will lapse in full.
BOARD CHANGES AND REMUNERATION
ARRANGEMENTS FOR OUR NEW CEO
AND CFO
Our CEO, Mr Widerström’s salary has been
set at £676,000, which is in line with the
salary of his predecessor reflecting his
significant experience in the online gaming
industry, pension of 5% of salary and
benefits in line with policy. Mr Widerström’s
annual bonus opportunity is 150% of salary,
representing a reduction of 50% of salary to
his predecessor, and an LTIP opportunity of
200% of salary. A single relocation payment
has been made to facilitate Mr Widerström’s
move from Sweden to the UK, the net
amount of which is repayable if he resigns
and leaves the business within two years of
appointment.
Following Mr Widerström’s appointment,
Lord Mendelsohn resumed his position as
Non-Executive Chair having acted as interim
Executive Chair since 30 January 2023 when
the former CEO stepped down from the
Board.
Our new CFO, Mr Wilkins’ annual salary
has been set at £430,000, which the
Committee has assessed to be the market
rate for the role at the time of appointment.
The salary represents an increase to his
predecessor’s salary which the Committee
considers to be appropriate, noting that the
salary of our former CFO was significantly
below market and Mr Wilkins' extensive
experience in the sector and in CFO roles
at both private and public companies.
Mr Wilkins will receive a pension of 5% of
salary and benefits in line with policy. Mr
Wilkins’ annual bonus opportunity for 2024
is 125% of salary, representing a reduction
of 25% of salary in comparison with his
predecessor, and an LTIP opportunity of
175% of salary, representing an increase
of 25% of salary in comparison with his
predecessor. The Committee believes that
the overall package, including the decrease
in annual bonus opportunity and increase
in LTIP award level, aligns our new CFO to
shareholder interests and the long-term
priorities of the business as we look to
grow and drive value creation in the
coming years.
Mr Dafna, former CFO, stepped down from
the Board on 2 October 2023 and left the
business on 31 December 2023. Full details
of his remuneration are set out in the main
body of this report.
Andria Vidler, independent Non-Executive
Director stepped down from the Board
and as Chair of the ESG Committee on 30
September 2023. Non-Executive Director
fees were paid to the date she stepped
down from the Board.
REMUNERATION POLICY REVIEW
During the year the Committee spent time
reviewing the Remuneration Policy ahead
of the next triennial policy vote at the 2024
AGM. The conclusion of this review was
that the current structure, subject to limited
refinements, remained appropriate in light of
our strategy. The limited changes proposed
facilitate the operation of the policy in
the coming years and in respect of bonus
deferral, align to best practice. The key
changes to the policy are:
• Changing bonus deferral such that one-
third of any bonus paid will be deferred
for a period of two years. The deferral is
structured so that one-third of the bonus
earned (net of tax) is used to buy shares
which are subject to a holding period of
two years. The shares are therefore not
forfeitable on cessation for any reason but
will be subject to clawback for the holding
period. Previously, the policy required
deferral of bonus over 100% of salary in
three equal tranches over one, two and
three years.
• The inclusion of an exceptional LTIP award
limit of 300% of salary. The Committee
has no current intention to use this
exceptional limit but wants to ensure
that the policy is future proofed for the
three-year policy period, and it has the
flexibility in exceptional circumstances to
use this higher award level to incentivise
the Executive Directors to deliver our
significant turnaround and value creation
plans during the next three-year policy
life. The normal maximum award level
will remain at 200% of salary, and award
levels will not be increased above this
without prior shareholder consultation.
• There are some minor changes of a
housekeeping nature to include:
– amending the policy wording for the
LTIP to enable the inclusion of non-
financial and ESG measures;
– removing the maximum pension
contribution rate of 15% of salary to
specify that pension is capped at the
workforce rate from time to time. The
Executive Directors currently receive a
pension contribution of 5% of salary,
which is aligned to the UK workforce;
– providing that Executive Directors are
eligible to participate in all-employee
share plans on the same terms as
employees, following the successful
launch of our SAYE Sharesave scheme
in 2023;
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ANNUAL REPORT & ACCOUNTS 2023 STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SUPPLEMENTARY INFORMATION
REMUNERATION COMMITTEE CONTINUED
REMUNERATION POLICY REVIEW
CONTINUED
– amending the way in which the
shareholding guideline is achieved so
that Executive Directors have a period
of five years from appointment to meet
the requirement; and
– additionally, some minor wording
changes have been made to reflect
operational changes following the
acquisition of the UK business of William
Hill, and that our Executive Directors are
now based in the UK.
IMPLEMENTATION OF UPDATED
POLICY FOR 2024
Base salaries for the Executive Directors
were set on appointment and therefore no
changes to salaries will be made for 2024.
As such, the Executive Directors' first salary
review date will be 1 April 2025.
The annual bonus opportunity will be 150%
of salary for the CEO and 125% of salary for
the CFO with LTIP awards of 200% and 175%
of salary, respectively.
With the appointment of our new executive
team, and the CEO’s strategic review
and recovery and value creation plan,
the Committee has considered carefully
how to ensure that incentive measures
support our business strategy. The annual
bonus for 2024 is based on a mix of key
financial and strategic measures which
underpin our value creation plan: 20% on
revenue, 20% on adjusted EBITDA, 15% on
leverage using net debt to adjusted EBITDA
ratio, 25% on strategic objectives, 10% on
personal objectives and 10% on an ESG
scorecard split 50% to safer gambling,
25% to environmental impact and 25%
to employee engagement. The strategic
objective element of the bonus is focused
on delivery of the key strategic initiatives
of our value creation plan. The personal
objective element is focused on a range of
important priorities not explicitly included
in the Group bonus measures including the
transformation programme and desired shift
in organisational culture. The Committee has
considered carefully the balance and focus
of the annual bonus metrics across our key
priorities for the year ahead. We have not
included a specific regulatory compliance
measure for 2024 but the Committee will
scale back the formulaic outcome of the
bonus if it has significant compliance
concerns, including but not limited to
issues either raised by, or reportable to, the
regulator of any market. In line with the new
policy, one-third of any bonus earned will
be used to purchase Company shares that
cannot be sold for a period of two years.
64
888 HOLDINGS PLC CONCLUSION
The Committee has considered the
operation of the policy for 2023 and is
comfortable that remuneration outcomes
are appropriate in the context of a critical
year for the Group, and that the policy has
operated as intended.
The proposed changes to policy, and the
way the policy will be operated for 2024, are
considered to be aligned with strategy going
forward as we look to grow and drive value
creation in the coming years.
I hope you will find this report helpful
and informative, and I look forward to
shareholders’ support for the shareholder
resolution on this Remuneration Report
excluding the Directors’ Remuneration Policy
and the separate resolution for the Directors’
Remuneration Policy at our forthcoming
Annual General Meeting.
I am available for any questions or queries
you may have and can be reached through
our Company Secretary.
ANDREA GISLE JOOSEN
Chair of the Remuneration Committee
26 March 2024
The performance measures and weightings
for the LTIP have also been reviewed, with
50% continuing to be based on relative
TSR, split equally between a bespoke sector
peer group and the FTSE 250 excluding
investment trusts. The remaining 50% will
be based on a new measure of net value
creation for shareholders which combines
our focus on growth and value creation
with reducing net debt. This measure
replaces the earnings per share metric
used in previous LTIP awards as it provides
specific focus on our combined priorities
of profit growth and debt reduction. The
Committee is in the process of finalising
the performance targets for the net value
creation element and they will be disclosed
in the RNS at the time of grant.
SHAREHOLDER ENGAGEMENT
As part of our policy review, I have reached
out to our largest shareholders to provide
them with the opportunity to meet with
me as the new Committee Chair and to
provide feedback on our policy proposals.
Responses from shareholders have
been limited and I remain available to
shareholders if they would like to discuss our
new policy or our approach to remuneration
more broadly. Those shareholders that
have provided feedback have been
overall supportive of the Committee’s
approach, understanding the need to align
remuneration to our recovery and value
creation plan.
WIDER WORKFORCE REMUNERATION
The Committee continues to review and
consider the pay arrangements for our
workforce, particularly given continuing
inflationary pressures on household
incomes and our cost reduction exercise.
The workforce salary increase for 2024 is
budgeted at 3%, excluding UK retail where
rates of pay will be increased to align with
the 2024 National Living Wage.
We were pleased to launch our all-
employee Sharesave share option scheme
in September 2023, with employees globally
invited to participate in the scheme and
share in the future success of the business
through the purchase of shares offered at
a discount to the market price. We were
delighted that over 2,000 colleagues
participated in the Sharesave scheme. The
scheme was shortlisted in four categories at
the 2023 ProShare Awards, winning for Best
Employee Share Plan Outcome Following A
Major Corporate Change.
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ANNUAL REPORT & ACCOUNTS 2023 STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SUPPLEMENTARY INFORMATION
DIRECTORS’ REMUNERATION REPORT
888 Holdings 2024 Directors’ Remuneration Policy
The Directors’ Remuneration Policy set out below is subject, as a company incorporated in Gibraltar, to an advisory shareholder vote at the
2024 AGM on 13 May 2024 and, subject to approval, the policy is intended to apply for a period of up to three years from that date.
DECISION-MAKING PROCESS FOR DETERMINATION, REVIEW AND IMPLEMENTATION OF POLICY
The review of the policy is carried out by the Remuneration Committee, in the absence of the Executive Directors, where appropriate,
to manage potential conflicts of interest, and with the advice of our remuneration consultant. The Committee’s review process includes
consideration of how the current policy aligns to and supports the business strategy, market practice, regulation and governance
developments as well as wider pay context, such as Group reward arrangements. The Committee also considers the guidelines of
shareholder representative bodies, proxy agencies and investor expectations and as part of the review process our largest shareholders
are consulted.
As part of the policy review, engagement with our shareholders and proxy agencies will include the operation of the policy for the year
ahead. There will also be engagement where no changes to the policy are being made but significant changes are being considered to the
operation of the policy.
The base salary increases and broader remuneration arrangements, including pension provision, for the wider workforce are considered by
the Committee when determining and implementing the remuneration policy for the Executive Directors.
The implementation of the policy is considered annually by the Committee for the year ahead in light of the strategic priorities. Incentive
metrics and target scales are also reviewed and recalibrated as necessary based on a number of internal and external reference points to
ensure that they remain appropriate.
CHANGES TO THE REMUNERATION POLICY
A summary of the changes to the policy are set out below.
The policy is presented with updated wording and format to align with best practice, noting that the overall policy has not been updated
as a whole since its original introduction in 2016. However, only limited substantive changes have been made within this new format.
• Introducing an exceptional maximum LTIP award level of 300% of salary. The normal maximum award level of 200% of salary is
unchanged.
• Updating our approach to annual bonus deferral so that one third of any bonus paid will be deferred for a period of two years, rather
than only bonus over 100% of salary. One third of the (net of tax) bonus is used to buy shares in 888 which are subject to a holding
period of two years. These shares are not forfeit on cessation of employment, but clawback continues to apply.
• Removal of the maximum pension opportunity of up to 15% of salary, with wording to confirm pension is capped at the workforce rate.
• Clarification that the range of performance measures that can be used under the LTIP includes non-financial and environmental, social
and governance (ESG) measures.
• Inclusion of the opportunity to participate in any all-employee share plan on the same terms as employees, set up by the Company.
• Changing the way in which the shareholding requirement is achieved such that Executive Directors will be expected to retain shares from
incentive awards so that they are able to meet the shareholding requirement within five years of appointment to the Board.
• Additionally, some minor wording changes have been made to reflect operational changes following the acquisition of William Hill, and
that our Executive Directors are now based in the UK, for example salary increases being usually effective 1 April.
ALIGNMENT OF THE POLICY WITH UK CORPORATE GOVERNANCE CODE PROVISION 40
CLARITY
SIMPLICITY
RISK
The policy and the way it is implemented is clearly disclosed in this policy section of the Remuneration Report
and in the Annual Statement. The Committee consults with shareholders on the design of the policy and any
changes to its implementation.
The policy is simple and straightforward, based on a mix of fixed and variable pay. The annual bonus and LTIP
include performance conditions which are aligned with key strategic objectives of the business.
Performance targets for the incentive schemes provide appropriate rewards for stretching levels of performance
without driving behaviour which is inconsistent with the Company’s risk profile. Reputational risk from a perception
of 'excessive' payouts is limited by the maximum award levels set out in the policy and the Committee’s discretion
to adjust formulaic remuneration outcomes. To avoid conflicts of interest, no Executive Director or other member
of management is present when their own specific remuneration is under discussion.
PREDICTABILITY
The policy includes full details of the individual limits in place for the incentive schemes as well as 'scenario charts'
which set out potential payouts in the event of different levels of performance.
PROPORTIONALITY There is a clear link between individual awards, delivery of strategy and our long-term performance. In addition,
the significant role played by incentive/’at-risk’ pay and the presence of malus and clawback provisions ensure
that poor performance is not rewarded.
ALIGNMENT
TO CULTURE
The approach to Directors’ remuneration is consistent with the Group’s culture and values, as well as the
Group strategy.
66
888 HOLDINGS PLC REMUNERATION POLICY TABLE
BASE SALARY
PAY ELEMENT AND PURPOSE
To recruit, motivate and retain high-calibre Executive Directors by offering salaries at market-
competitive levels. Reflects individual experience and role.
OPERATION
Salaries are normally reviewed annually with any changes normally effective from 1 April. Positioning
and increases are influenced by:
• our sector, size and complexity, both in the UK and internationally;
• the skills, experience and performance of the individual;
• changes in responsibility or position;
• changes in broader workforce salary; and
• the performance of 888 as a whole.
OPPORTUNITY
Any increase to Directors’ salaries will generally be no higher than the average increase made to the
workforce. However, a higher increase may be made, for example, where there is a change to role,
there is additional responsibility or complexity, or in other exceptional circumstances.
PERFORMANCE METRICS,
WEIGHTING AND
ASSESSMENT
None.
BENEFITS
PAY ELEMENT AND PURPOSE
To provide a market-competitive level of benefits based on the market in which the Executive
is employed.
OPERATION
The Executive Directors receive benefits which include, but are not limited to, a company car or car
allowance, health insurance, disability and life assurance.
The Remuneration Committee retains the discretion to be able to include other benefits including (but
not limited to) relocation expenses and tax equalisation.
Any reasonable business-related expenses can be reimbursed, including the tax thereon if determined
to be a taxable benefit.
OPPORTUNITY
The maximum will be set at the cost of providing the benefits described. The Remuneration Committee
reviews benefit offering and cost periodically.
PERFORMANCE METRICS,
WEIGHTING AND
ASSESSMENT
None.
PENSION
PAY ELEMENT AND PURPOSE
To provide market-competitive retirement benefits.
OPERATION
Contribution to the Group pension scheme or a cash allowance in lieu of pension.
OPPORTUNITY
Pension contribution rate or cash allowance is in line with the rate applicable to the workforce in the
country of appointment (currently 5% of salary in the UK).
PERFORMANCE METRICS,
WEIGHTING AND
ASSESSMENT
None.
67
ANNUAL REPORT & ACCOUNTS 2023 STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SUPPLEMENTARY INFORMATION
DIRECTORS’ REMUNERATION REPORT CONTINUED
ANNUAL BONUS PLAN
PAY ELEMENT AND PURPOSE
To drive and reward annual performance against financial and non-financial KPIs and to encourage
long-term sustainable growth and alignment with shareholders’ interests through payment in shares.
OPERATION
The Remuneration Committee will determine the annual bonus payable after the year-end, based on
an assessment of performance against targets.
No more than two thirds of the annual bonus will be paid out in cash after the end of the financial
year. The remaining amount, post-tax, will be used to purchase shares which the Executive is required
to hold for a period of two years. The holding period continues on cessation of employment.
Malus and clawback provisions will apply up to the date of the annual bonus determination and
for three years thereafter. Circumstances include if the financial statements of 888 were materially
misstated, an error occurred in assessing the performance conditions of a bonus, if the Executive
ceased to be a Director or employee due to gross misconduct, or in an event of corporate failure,
failure of risk management or reputational damage.
OPPORTUNITY
The maximum annual bonus opportunity is 200% of salary.
PERFORMANCE METRICS,
WEIGHTING AND
ASSESSMENT
A range of key financial and non-financial measures, including strategic objectives and ESG measures,
may be set for the annual bonus.
The majority of the performance measures will be based on financial performance.
Performance measures will be set each year taking into account Company strategy.
No more than 25% of the relevant portion of the annual bonus is payable for delivering a threshold
level of performance, and no more than 50% is payable for delivering a target level of performance
(where the nature of the performance metric allows such an approach).
The Remuneration Committee may adjust the formula-driven outturn of the annual bonus calculation
in the event that the Committee considers it appropriate, for example, where it does not reflect
underlying performance, overall shareholder experience or employee reward outcome.
LONG-TERM INCENTIVE PLAN (LTIP)
PAY ELEMENT AND PURPOSE
Rewards Executive Directors for achieving longer-term performance and sustainable growth for
shareholders over a longer-term timeframe. Enables Executive Directors to build a meaningful
shareholding over time and aligns with shareholders’ interests.
OPERATION
Awards can be granted in the form of conditional shares or nil cost options.
Awards will vest at the end of a performance period of at least three years, subject to the satisfaction
of performance conditions.
The net of tax number of shares that vest will be subject to an additional two-year holding period,
during which the shares cannot be sold. The holding period continues on cessation of employment.
An additional payment, normally in shares, may be made equal to the value of dividends which would
have accrued on vested shares.
Malus and clawback provisions will apply for three years post vesting. Circumstances include if the
financial statements of 888 were materially misstated, an error occurred in determining award levels
and assessing the performance conditions of an LTIP, if the Executive ceased to be a Director or
employee due to gross misconduct, or in an event of corporate failure, failure of risk management or
reputational damage.
OPPORTUNITY
The exceptional maximum award level is 300% of salary.
The normal maximum award level is 200% of salary.
The award level will not be increased above the normal maximum award level of 200% of salary
without shareholder consultation.
68
888 HOLDINGS PLC LONG-TERM INCENTIVE PLAN (LTIP) CONTINUED
PERFORMANCE METRICS,
WEIGHTING AND
ASSESSMENT
Awards vest based on a range of financial, total shareholder return and non-financial measures,
including but not limited to strategic and ESG measures. Strategic and ESG measures, if used, will
represent a minority of the award.
Threshold performance under each metric will result in no more than 25% of that portion of the
award vesting.
The Remuneration Committee may adjust the formula-driven outturn of the LTIP in the event that
it considers it appropriate, for example, where the Committee considers that it does not reflect
underlying performance, overall shareholder experience or employee reward outcome.
ALL-EMPLOYEE SHARE PLANS
PAY ELEMENT AND PURPOSE
To align with Group employee reward and to promote share ownership.
OPERATION
The Executive Directors may participate in any all-employee share plan operated by the Company.
OPPORTUNITY
Participation will be capped by the HMRC limits applying to the respective plan.
PERFORMANCE METRICS,
WEIGHTING AND
ASSESSMENT
None.
SHAREHOLDING REQUIREMENT
PAY ELEMENT AND PURPOSE
To provide alignment with shareholders’ interests.
OPERATION
Executive Directors are required to retain shares from incentive awards so that they are able to meet
the shareholding requirement within five years of appointment to the Board.
OPPORTUNITY
200% of salary during employment.
The lower of shares held on cessation and 100% of salary for one year post cessation and 50% of
salary for the second year post cessation, subject to the Committee amending this requirement in
exceptional circumstances.
PERFORMANCE METRICS,
WEIGHTING AND
ASSESSMENT
None.
NON-EXECUTIVE DIRECTORS
PAY ELEMENT AND PURPOSE
OPERATION
To provide an appropriate fee level to attract and retain a Chair and Non-Executive Directors and to
appropriately recognise the responsibilities and time commitment.
Non-Executive Directors are paid a base fee and additional fees for acting as Senior Independent
Director and for the Chair or membership of Board Committees (and as appropriate to reflect other
additional responsibilities and/or additional time commitments).
Market data for comparable roles and companies of a similar size, complexity and sector in the
UK and internationally, complexity of the roles and time commitment are taken into account in
determining the fee positioning.
Neither the Chair of the Board nor the Non-Executive Directors participate in the pension plan or any
incentive plans.
OPPORTUNITY
The fee for the Chair of the Board is set by the Remuneration Committee, the Non-Executive Directors’
fees are set by the Board (excluding the Non-Executive Directors).
The Company will reimburse any reasonable expenses incurred in carrying out Director duties (and
related tax if applicable).
PERFORMANCE METRICS,
WEIGHTING AND
ASSESSMENT
None.
69
ANNUAL REPORT & ACCOUNTS 2023 STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SUPPLEMENTARY INFORMATION
DIRECTORS’ REMUNERATION REPORT CONTINUED
NOTES TO THE REMUNERATION POLICY TABLE
Choice of performance measures
Performance metrics for incentives, weightings and targets are considered annually for the year ahead. The Remuneration Committee
will select the most appropriate performance measures for the annual bonus and LTIP, taking into account Company strategy and key
performance indicators. Targets are set taking into account the strategic plan, the business plan, brokers' forecasts and the market
environment. The Annual Report on Remuneration sets out why performance measures are chosen each year.
Consideration of employment conditions elsewhere in the Group
The reward packages for the senior management team and wider employee population are structured to attract and retain the best talent
and be competitive within our industry.
The performance measures under the Annual Incentive Plan and Long-Term Incentive Plan for Executives are cascaded to other eligible
employees. There is a strong focus on performance-related pay, with appropriate levels of differentiation based on seniority and
accountability. The Company also encourages employee share ownership through the new Sharesave that provides the opportunity for all
employees to share in the Company’s success. The remuneration approach for Executive Directors is consistent with the reward package
for members of the Executive Committee and the senior management population. A much higher proportion of total remuneration for
the Executive Directors is variable pay and linked to business performance, compared to the rest of the employee population, so that
remuneration outcomes will be aligned to business performance and the shareholder experience.
Each year the Remuneration Committee is updated regarding the structure and quantum of the remuneration framework for employees,
as well as throughout the year being informed about the context and challenges relating to the remuneration of the wider workforce across
the world, to enable the Committee to consider the broader employee context when making executive remuneration decisions.
Legacy arrangements
For the avoidance of doubt, the Committee may approve payments to satisfy commitments agreed prior to the approval of this
Remuneration Policy. For example, awards which have been disclosed to shareholders in previous Remuneration Reports and any
commitment made to an individual before that individual became an Executive Director.
Discretion
The Committee operates the Group’s incentive plans according to their respective rules. The Committee retains discretion as to the
operation and administration of these incentive plans, within the limits of the plan rules, including but not limited to:
• Participants;
• Timings of grant and/or payment;
• Award size and/or payment;
• Settlement of the award;
• Selection, determination and adjustment of performance measures and targets;
• Adjustment to formulaic outcomes if they are considered to be inappropriate, taking into account any relevant factors;
• Measurement of performance and vesting in certain circumstances such as change of control or other corporate events; and
• Determination of the treatment of leavers.
Recruitment Policy
The remuneration package for a new Executive Director will take into account the skills and experience of the individual, the market rate for
a candidate of that experience and the importance of securing the relevant individual.
REMUNERATION ELEMENT
POLICY
Salary would be provided at such a level as is required to attract and secure the most appropriate
candidate while paying no more than is necessary.
If an Executive Director needs to re-locate in order to take up the role, the company may agree to
pay to cover the costs of relocation including (but not limited to), actual relocation costs, temporary
accommodation and travel expenses.
For external appointments, the Remuneration Committee may, if it is considered appropriate, provide
buy-out awards equivalent to the value of any forfeited remuneration including outstanding incentive
awards that will be forfeited on cessation of a Director’s previous employment. To the extent possible,
the buy-out of incentive awards will be made on a broadly like-for-like basis. The award will take
into account any performance conditions attached to the forfeited incentives, the vesting period,
the expected value and the nature of the awards (cash or equity). Any such buy-out award may be
granted under the LTIP or the provision available under UKLA Listing Rule 9.4.2. to enable awards to be
made outside the LTIP in exceptional circumstances.
For an internal appointment, any variable pay element awarded in respect of the prior role may be
allowed to continue and pay out according to its terms or adjusted as relevant to take into account
the appointment.
SALARY
RELOCATION
BUY-OUT AWARDS
70
888 HOLDINGS PLC NOTES TO THE REMUNERATION POLICY TABLE CONTINUED
Recruitment Policy continued
REMUNERATION ELEMENT
POLICY
ANNUAL INCENTIVE
The maximum annual bonus opportunity will be in line with the policy, up to the policy maximum of
200% of salary. Joiners may receive a pro-rated annual bonus for the year of joining based on their
employment as a proportion of the financial year and performance measures and/or targets may be
different to those set for other Executive Directors.
LTIP
The maximum LTIP award will be in line with the policy, with a normal award limit of up to 200% of
salary and an exceptional award limit of up to 300% of salary.
OTHER ELEMENTS
Benefits and pension will be set in line with the policy.
NON-EXECUTIVE DIRECTORS
Fees will be in line with the Remuneration Policy.
LOSS OF OFFICE POLICY
Any payments in the event of termination of an Executive Director will take account of the individual circumstances, including the reason
for termination, any contractual obligations and the rules of the applicable incentive plans. In the event of termination for cause (e.g.
gross misconduct) neither notice nor payment in lieu of notice will be given, and the Executive Director will cease to perform their services
immediately.
Treatment of other elements of the policy (including annual bonus and LTIP), will vary depending on whether a Director is defined as a
'good' or 'bad' leaver. The Remuneration Committee has the discretion to determine whether an Executive is a good leaver. Reasons for
good leaver treatment include, but are not limited to, injury, illness or disability, or otherwise with the agreement of the Committee.
The treatment of the various elements of pay on termination are summarised below.
PAY ELEMENT
GOOD LEAVER
BAD LEAVER
SALARY, BENEFITS, PENSION
If notice is served by either party, the Executive Director receives base salary, benefits and pension for
the duration of their notice period. The Company may, at its sole discretion, terminate the contract
immediately, at any time after notice is served, by making a payment in lieu of notice equivalent
to salary, benefits and pension, with any such payments being paid in monthly instalments over
the remaining notice period. The Executive Director will normally have a duty to seek alternative
employment and any outstanding payments will be subject to offset against earnings from any new
role.
ANNUAL BONUS
LTIP
OTHER
An annual bonus may be payable at the usual
time with performance measured at the usual
time. The annual bonus will normally be pro-rated
for the period of active employment during the
financial year.
Under the new policy, for bonus paid for FY24
and future years, shares purchased under the
annual bonus plan are beneficially owned by the
Executive Director and so they are not at risk
of forfeiture, other than in relation to clawback.
Shares subject to a holding period will be
released at the normal time.
Unvested shares awarded under the Deferred
Share Bonus Plan under the previous policy will
normally continue and vest at the usual time.
No bonus will normally be payable.
Under the new policy, shares purchased under
the annual bonus plan are beneficially owned
by the Executive Director and so they are not
at risk of forfeiture, other than in relation to
malus. Shares subject to a holding period will be
released at the normal time.
Unvested shares awarded under the Deferred
Share Bonus Plan under the previous policy will
normally lapse in full on cessation of employment.
If the participant ceases employment before
the normal vesting date, the award will usually
continue subject to performance conditions
and be pro-rated for time over the performance
period. The award will normally vest on the usual
vesting date. Shares subject to a holding period
will be released at the normal time.
If the participant ceases employment before
the normal vesting date, the unvested award will
lapse on cessation of employment.
If the participant ceases employment during a
holding period, the holding period will continue to
apply to the vested shares.
Depending upon circumstances, the Committee may make other payments, for example, to settle
statutory entitlements, legal claims or potential legal claims, for example in respect of an unfair
dismissal award, outplacement support and assistance with legal fees.
71
ANNUAL REPORT & ACCOUNTS 2023 STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SUPPLEMENTARY INFORMATION
DIRECTORS’ REMUNERATION REPORT CONTINUED
CHANGE OF CONTROL
There are no enhanced provisions on a change of control, but the Committee can exercise judgement and discretion in line with the
respective incentive plans.
The extent to which unvested awards under the LTIP will vest will be determined in accordance with the rules of the plan. The Committee
will determine the level of vesting taking into account the extent to which the performance conditions have been satisfied and, unless the
Committee determines otherwise, the period of time elapsed from the date of grant to the date of the relevant corporate event.
Holding periods applying to shares owned under the bonus plan and vested LTIP awards will normally cease to apply.
SERVICE AGREEMENTS AND LETTERS OF APPOINTMENT
Executive Directors
The Executive Directors have a service contract requiring 12 months’ notice of termination from either party as shown below. Their service
contracts are available for inspection at 888’s registered office and at each Annual General Meeting.
Executive Director
Date of appointment
Date of
current contract
Notice from
the Company
Per Widerström
16 October 2023
16 October 2023
12 months
Sean Wilkins
1 February 2024
1 February 2024
12 months
Notice from
the individual
12 months
12 months
Unexpired period
of service contract
Rolling
Rolling
Chair and Non-Executive Directors
The Non-Executive Directors serve subject to letters of appointment and are appointed subject to re-election at each annual general
meeting. The Non-Executive Directors are typically expected to serve for three years, although the Board may invite a Non-Executive
Director to serve for an additional period. Their letters of appointment are available for inspection at 888’s registered office and at each
Annual General Meeting.
The table below details the letter of appointments for each Non-Executive Director.
Non-Executive Directors
Date of appointment
Date of current letter of appointment Unexpired term of service contract
Lord Mendelsohn
Limor Ganot
Andrea Gisle Joosen
Anne de Kerckhove
Ori Shaked
Mark Summerfield
23/09/2020
(Non-Executive Director)
01/08/2020
05/07/2022
28/11/2017
13/09/2022
05/09/2019
01/04/2021
(Chair)
01/08/2023
05/07/2022
28/11/2023
13/09/2022
05/09/2022
31/03/2024
31/07/2026
04/07/2025
27/11/2026
12/09/2025
04/09/2025
HOW THE VIEWS OF SHAREHOLDERS ARE TAKEN INTO ACCOUNT WHEN DETERMINING DIRECTORS’ PAY
888 engages with shareholders in respect of remuneration generally, any proposed changes to the Directors’ Remuneration Policy and
significant changes to the operation of the policy. Views of shareholders and their representative bodies expressed at the Annual General
Meeting and feedback received at other times are considered by the Committee when determining remuneration. The Annual Report on
Remuneration sets out specific engagement for any one year.
The Committee continues to monitor developments in corporate governance and market practice as well as shareholder views when
reviewing executive remuneration structure and operation each year.
HOW EMPLOYEE PAY AND CONDITIONS ARE TAKEN INTO ACCOUNT WHEN DETERMINING DIRECTORS’ PAY
Whilst employees have not been formally consulted regarding the new Directors’ Remuneration Policy, the Committee has taken into
account the policy for employees across the workforce, including the cascade, in determining the new Remuneration Policy for Executive
Directors. Furthermore, when reviewing the approach to Executive Directors’ remuneration annually, the Committee is made aware of the
proposals for the wider workforce. For example, the average annual salary increase for the wider workforce is a key factor in determining
any salary increase for the Executive Directors.
FY24 REMUNERATION SCENARIOS FOR EXECUTIVE DIRECTORS
The charts below illustrate the potential remuneration opportunities for the Executive Directors during FY24 based on different performance
scenarios. Remuneration for the CFO has been shown on a full year basis.
72
888 HOLDINGS PLC LTIP with 50%
share price growth
LTIP
Annual bonus
Fixed pay
FY24 REMUNERATION SCENARIOS FOR EXECUTIVE DIRECTORS CONTINUED
£4,000k
£3,500k
£3,000k
£2,500k
£2,000k
£1,500k
£1,000k
£500k
0
£3,768k
£3,092k
44%
33%
£1,909k
35%
27%
£726k
100%
38%
23%
£466k
100%
Below target
Target
CEO
Maximum
Below target
£2,132k
£1,756k
42%
31%
27%
Maximum
£1,111k
34%
24%
42%
Target
CFO
Minimum: Comprises fixed pay only using the salary for FY24, an estimate of the value of benefits and a company pension contribution
in line with policy.
On-Target: Fixed pay plus an annual bonus payout at 50% of maximum (75% of salary for the CEO and 62.5% of salary for the CFO) and
LTIP vesting at 50% of face value (100% of salary for the CEO and 87.5% of salary for the CFO).
Maximum: Comprises fixed pay and assumes full payout under the annual bonus (150% of salary for the CEO and 125% for the CFO) and
the LTIP grant vests in full (200% of salary for the CEO and 175% for the CFO). The maximum scenario includes an additional element to
represent 50% share price growth on the LTIP award from the date of grant to vesting.
73
ANNUAL REPORT & ACCOUNTS 2023 STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SUPPLEMENTARY INFORMATION
DIRECTORS’ REMUNERATION REPORT CONTINUED
ANNUAL REPORT ON REMUNERATION
This Annual Report on Remuneration, together with the Chair’s Annual Statement, will be subject to an advisory vote at the Annual General
Meeting to be held on 13 May 2024. The information on page 74 with respect to Directors’ Emoluments and onwards through page 82 has
been audited.
OPERATION OF REMUNERATION POLICY FOR 2024
Base salaries
The CEO was appointed on 16 October 2023 and the CFO was appointed on 1 February 2024. The first salary review date for both Executive
Directors will be 1 April 2025.
Director
CEO
CFO
ANNUAL BONUS
2024
2023
Increase
£676,000
£430,000
£676,000
Appointed in 2024
N/A
N/A
The CEO’s maximum bonus opportunity is 150% of salary and the CFO’s maximum bonus opportunity is 125% of salary.
20% of bonus potential will be based on Group revenue, 20% Group adjusted EBITDA, 15% leverage targets calculated using net debt to
adjusted EBITDA ratio, 25% strategic objectives, 10% on an ESG scorecard (weighted 50% safer gambling, 25% environmental impact, 25%
employee engagement) and 10% based on personal objectives.
The annual bonus targets are considered by the Committee to be commercially sensitive at this time. Full retrospective disclosure of targets
and performance against them will be disclosed in next year’s report.
LONG-TERM INCENTIVE PLAN
The CEO will receive an award of 200% of salary and the CFO will receive an award of 175% of salary.
For 2024 performance conditions have been reviewed with 50% continuing to be based on relative TSR (50% against a bespoke sector
peer group and 50% against the FTSE250 excluding investment trusts). The remaining 50% will be based on a new measure of net value
creation for shareholders, to be calculated as follows:
• Gross economic value creation: adjusted EBITDA increase (2026 adjusted EBITDA minus 2023 adjusted EBITDA), multiplied by an agreed
multiple; PLUS
• Change in debt: 2026 adjusted net debt minus 2023 adjusted net debt; MINUS
• Change in equity: value of any equity issued.
At the time of writing, our CEO’s new strategy, and the related long-term financial and strategic targets, is still being finalised. The
performance targets for the net value creation measure are therefore still under review and will be disclosed in the RNS at the time of the
LTIP grant. The performance targets for the relative TSR measure against a bespoke sector peer group are performance equal to median
for threshold payout and median + 10% p.a. compounded for maximum payout. The performance targets for the relative TSR measure
against the FTSE 250 peer group are performance equal to median for threshold payout and upper quartile for maximum payout. 25% will
vest for threshold performance and 100% for achieving maximum, with straight-line vesting between these points.
PENSION AND BENEFITS
The CEO and CFO will both receive a pension allowance of 5% of salary. This is aligned to the pension contribution of the wider
UK workforce. Both Directors receive benefits in line with policy.
NON-EXECUTIVE DIRECTORS' FEES
The Non-Executive Director fees remain unchanged from 2023.
• Non-Executive Chair fee: £320,000
• Non-Executive Director fee: £90,000
• Senior Independent Director fee: £20,000
• Chair of a Board committee (inclusive of membership fee): £15,000
• Membership of Audit & Risk, Remuneration, ESG, Nominations or Gaming Compliance Committee: £5,000
74
888 HOLDINGS PLC REMUNERATION PAID TO EXECUTIVE DIRECTORS FOR SERVICES IN 2023
The following table presents the Executive Directors’ emoluments in respect of the year ended 31 December 2023.
Executive
Directors
Jon Mendelsohn,
Executive Chair
Per Widerström,
CEO
Itai Pazner,
former CEO
Yariv Dafna,
former CFO
Salary1
£’000
Taxable
benefits2
£’000
Annual
bonus
£’000
Long-term
incentives3
£’000
Pension4
£’000
2023
2022
2023
2023
2022
2023
2022
571
320
153
56
687
265
350
—
—
173
8
747
168
273
—
—
—
—
—
210
—
—
—
—
—
—
—
14
—
—
7
3
42
40
53
Total
£’000
571
320
333
67
1,476
683
690
Total
fixed pay
£’000
Total
variable pay
£’000
571
320
333
67
1,476
473
676
—
—
—
—
—
210
14
1. Lord Mendelsohn’s salary for 2023 reflects his role as Non-Executive Chair between 1 January 2023 to 29 January 2023 and 16 October 2023 to 31
December 2023 and Executive Chair from 30 January 2023 to 15 October 2023, with 2022 comparison showing his fees as Non-Executive Chair for the
entire year.
Mr Widerström’s salary is shown for the period from 16 October 2023 to 31 December 2023.
Mr Dafna’s salary for 2023 is shown for the period from 1 January 2023 to 2 October 2023.
2. Benefits for Mr Widerström include a one-off relocation support payment of £150,000 and other one-off costs in association with his move from Sweden to
the UK (total £21,094). Other benefits include private healthcare for Mr Widerström and his family, life assurance and car allowance.
Benefits for Mr Dafna include relocation related payments including housing, schooling and UK tax return support (total £93,942 for 12 months) as well as
car allowance and health, disability and life insurance.
Benefits for Mr Pazner include health, disability and life insurance and car allowance. All accommodation and schooling support payable for the period
1 January 2023 to 30 January 2023 was disclosed in the 2022 DRR.
3. Performance-based long-term incentives are disclosed in the financial year in which the performance period ends. Mr Dafna’s LTIP for the single total
figure in 2022 is the value of the 2020 LTIP award, for which performance ended on 31 December 2022, and will vest in 2024 due to the pro-rated award in
respect of his year of appointment in 2020 being granted at the same time as the 2021 LTIP award. The award was pro-rated on termination such that the
total consideration for this award is 32,361 shares. 50% of the award will vest representing a total of 16,180 shares. The value is based on the average share
price for the last three months of FY23 of 85.10p. This price compares to a share price on the date of grant of £3.485.
4. Mr Widerström receives a pension cash allowance of 5% of base salary. Mr Dafna received a pension cash allowance of 15% of base salary. Mr Pazner
received a pension cash allowance of 5% of base salary.
NON-EXECUTIVE DIRECTORS’ FEES
The following table presents the Non-Executive Director fees in respect of the year ended 31 December 2023. The Chair is included in the
Executive Director table above. All amounts are in £’000.
Non-Executive Directors
Anne de Kerckhove1
Mark Summerfield2
Limor Ganot
Andria Vidler3
Andrea Gisle Joosen4
Ori Shaked
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
Fee
179
180
145
145
101
100
71
44
100
44
94
29
Other
Total fee
2
—
—
—
—
1
—
—
1
—
—
—
181
180
145
145
101
101
71
44
101
44
94
29
1. Anne de Kerckhove received an additional non-executive director fee of £30,000 for 2023 for the additional time spent during the year on integration
matters. In addition, Anne de Kerckhove received reimbursed grossed up expenses of £2,077.
2. Mark Summerfield received an additional non-executive director fee of £30,000 for 2023 for the additional time spent during the year on integration
matters.
3. Andria Vidler stood down on 30 September 2023 due to her appointment as UK CEO of Allwyn Entertainment UK. Andria received reimbursed grossed up
expenses of £469.
4. Andrea Gisle Joosen received reimbursed grossed up expenses of £1,027.
There have been a number of changes in Committee membership in 2023 which are reflected in the fees set out above and have previously
been disclosed by the Group.
75
ANNUAL REPORT & ACCOUNTS 2023 STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SUPPLEMENTARY INFORMATION
DIRECTORS’ REMUNERATION REPORT CONTINUED
ANNUAL BONUS PAYMENTS IN RESPECT OF 2023 PERFORMANCE
The maximum bonus opportunity for our new CEO was 150% of salary pro-rated to his appointment to the Board on 16 October 2023.
The maximum bonus opportunity was 150% of salary for our former CFO.
The annual bonus for our former CFO was based 60% on Group operational targets (revenue, EBITDA, EBITDA margin, regulatory
compliance and an ESG scorecard with 50% safer gambling, 25% environmental and 25% employee engagement) and 40% on key
integration objectives (40% operational cash flow and the remainder integration priorities). The annual bonus for the CEO was based solely
on the Group operational targets.
GROUP OPERATIONAL TARGETS
The Group operational targets were weighted 100% of the CEO’s bonus and 60% of our former CEO’s bonus.
A hurdle was in place such that the Group must achieve at least 90% of the adjusted EBITDA target for any bonus to be payable in respect
of operational targets. This hurdle was not satisfied and therefore no bonus is payable for the Group operational element, irrespective of
performance against other operational targets. Performance against targets is set out in the table below:
Performance measure
ADJUSTED EBITDA
EBITDA MARGIN
REVENUE
REGULATORY COMPLIANCE —
TIMELY AND EFFECTIVE EXECUTION
OF PROACTIVE COMMITMENTS
MADE TO IMPROVE COMPLIANCE
STANDARDS1
ESG
SCORECARD
PLAYER — TIMELY
AND EFFECTIVE
EXECUTION
OF PROACTIVE
COMMITMENTS
MADE TO
IMPROVE
PLAYER SAFETY
STANDARDS1
PEOPLE —
GROUP ENPS
PLANET — SCOPE
1&2 EMISSIONS
REDUCTION
Weighting
Threshold
(10% payout)
Target
(50% payout)
Maximum
(100% payout)
Actual
performance
Formulaic bonus
outcome (% of
maximum)
20%
25%
20%
£380m
20%
£1,724m
£400m
22%
£420m
23%
£1,815m
£1,905m
£308m
18.0%
£1,711m
0%
0%
0%
20%
90%
95%
100%
100%
100%
7.5%
3.75%
90%
+6
95%
+8
+10
100%
100%
100%
+11
6%
100%
100%
3.75%
0%
1.25%
2.50%
1. The oversight and assessment of commitments made was overseen by the Executive Risk and Sustainability Committee with routine upward reporting
provided to the Board. All commitments made were completed on schedule and performance has therefore been assessed at the maximum level.
76
888 HOLDINGS PLC
CFO INTEGRATION OBJECTIVE PERFORMANCE
Objective
Weighting
Measurement
Performance
MANAGEMENT OF OPERATIONAL CASH
FLOW
RESTRUCTURE AND EFFECTIVE
LEADERSHIP OF THE FINANCE TEAM
40%
30%
EFFECTIVE CONTRIBUTION AND
MANAGEMENT OF THE INTEGRATION
PROGRAMME
30%
TOTAL BONUS PAYABLE FOR 2023
Director
Per Widerström
Yariv Dafna
Score (% of
maximum)
100%
100%
Use of RCF
through 2023
No use of RCF at end June 2023 or end
December 2023.
Finance function people cost reduced
by c.13% through effective restructure
while maintaining the required balance of
expertise and skills.
Positive eNPS for employee satisfaction
maintained through 2023.
Reduce cost
of finance
function by
at least 10%
and maintain
team
engagement
through 2023
Performance
against
synergy and
CTA targets
for FY23
Achieved over £150m of synergies against
an accelerated and increased target of
£150m.
Integration and trans-formation costs in
FY23 below budget by c.30%.
100%
Operational
targets payout (%
of maximum)
Integration
objectives payout
(% of maximum)
Total bonus payout
(% of maximum)
Total payout
£’000
0%
0%
N/A
100%
0%
40 %
—
£210
LONG-TERM INCENTIVE AWARDS WITH PERFORMANCE PERIOD ENDING IN THE YEAR ENDED 31 DECEMBER 2023
The 2021 LTIP awards have a performance period that ended on 31 December 2023. The awards are based 50% on TSR performance and
50% on adjusted EPS targets.
The table below sets out the achievement against the TSR and adjusted EPS performance condition, resulting in total vesting of 0% of
maximum.
Performance level
Below threshold
Threshold
Maximum
Actual achieved
TSR1
Adjusted EPS
Performance required
% vesting Performance required
% vesting
Below median
Median = -1.3% p.a.
Median + 10% p.a. =
8.6% p.a.
-31.3% p.a.
0%
25%
100%
0%
Less than 3% CAGR
3% CAGR
9% CAGR
TBC CAGR
0%
25%
100%
0%
1. TSR peer group comprises Betsson AB, Flutter Entertainment, Gamesys, Entain, Kambi Group, Kindred Group, LeoVegas, Playtech and Rank Group.
The only participant in the 2021 LTIP is Yariv Dafna. This award was pro-rated on termination such that the total consideration for the award
is now 137,733 shares, all of which have lapsed.
77
ANNUAL REPORT & ACCOUNTS 2023 STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SUPPLEMENTARY INFORMATION
DIRECTORS’ REMUNERATION REPORT CONTINUED
SCHEME INTERESTS AWARDED DURING THE YEAR
The table below sets out the grants under the 888 Holdings Plc Long Term Incentive Plan in 2023.
Executive
Award type
Grant date
Number of
awards granted1
Face value of
awards granted2
Face value of
awards as %
salary
% vesting
at threshold
performance
Yariv Dafna
LTIP
17 April 2023
180,812
£135,067
39%
25%
1. Mr Dafna’s award was based on a pro-rated 50% of salary award reflecting his employment with the business for one year of the three-year performance
period.
The number of shares granted is based on a 30% discount to the number he would have received based on the share price on 14 February of 67 pence.
2. The share price used to determine face value is the share price on the day prior to grant (74.70 pence on 14 April 2023).
3. This award is due to vest subject to performance conditions being met at the end of the performance period ending 31 December 2025. The performance
conditions for the 2023 LTIP are split equally between earnings per share (EPS) targets and relative total shareholder return (TSR) targets. TSR is to be
measured 50% against a sector peer group (comprising Bally’s Corporation, Betsson AB, Flutter Entertainment plc, Entain plc, Kambi Group plc, Kindred
Group plc, Playtech plc and Rank Group plc) and 50% against the FTSE 250 excluding investment trusts.
Vesting begins for achievement of the threshold target for which 25% of the award vests and increases on a straight-line basis to the
maximum target for which 100% of the award vests for achievement of the target or above. No vesting occurs below the threshold target.
Performance is measured over three years beginning 1 January 2023.
The EPS targets set at grant were: Threshold — 20.3% CAGR and Maximum — 24.0% CAGR.
The TSR targets in respect of the sector peer group are: Threshold — Median (888’s TSR performance in line with the median TSR of the
peer group) and Maximum — Median + 10% p.a. compounded.
The TSR targets in respect of the FTSE 250 excluding investment trusts are: Threshold — Median (888’s TSR performance in line with the
median of the comparator group) and Maximum — Upper quartile (888’s TSR performance in line with the upper quartile TSR of the
comparator group).
LOSS OF OFFICE PAYMENTS AND PAYMENTS TO PAST DIRECTORS
Mr Dafna, former CFO, stepped down from the Board on 2 October 2023 and his employment ended on 12 January 2024. Mr Dafna
received his normal salary of £98,264, pension of £14,629 and benefits of £21,108 for the period 3 October 2023 to 12 January 2024 with
insurance benefits continuing and schooling support for the remainder of the 2023/24 academic year of £45,738.
DIRECTORS’ SHAREHOLDINGS AND SHARE INTERESTS
The Executive Directors are required to build and maintain a shareholding in 888 worth two times their annual salary as set out in the
Remuneration Policy.
Details of the Directors’ interests (and of their connected persons) in shares as at 31 December 2023 are shown in the table below. There
were no changes in the Directors’ interests in shares between 31 December 2023 and the date of this Report.
Director
Itai Pazner1
Yariv Dafna2
Per Widerström
Mark Summerfield
Anne de Kerckhove
Lord Mendelsohn
Limor Ganot
Andria Vidler
Andrea Gisle Joosen
Ori Shaked
Legally
owned
1,259,291
41,977
2,066,535
32,412
—
250,000
—
—
—
294,482
Unvested
shares with
performance
conditions
Unvested
shares
without
performance
conditions
Unvested
options with
performance
conditions
Unvested
options
without
performance
conditions
Vested
unexercised
options
Total for
shareholding
guideline
Total
%
Shareholding
as % of
salary3
—
180,812
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
449,650
—
—
—
—
—
—
—
—
—
35,607
1,294,898
1,278,163
38,058
—
—
—
—
—
—
—
—
21,995
732,492
— 2,066,535
32,412
—
—
—
250,000
—
—
—
—
—
—
—
294,482
—
73,805
2,066,535
—
—
—
—
—
—
—
181%
20%
292%
N/A
N/A
N/A
N/A
N/A
N/A
N/A
1. Information for Mr Pazner is shown at the date he stepped down from the Board reflecting shares and options lapsed on termination of employment.
2. Information for Mr Dafna is shown at the date he stepped down from the Board. Unvested awards with performance conditions have subsequently been
pro-rated on termination of employment, with the 2020 and 2021 awards vesting in 2024 as disclosed.
3. The Executive Directors are required to build and maintain a shareholding equivalent to 200% of base salary. Shares counting towards this guideline include
legally owned shares, unvested options without performance conditions (valued on a net of tax basis), and fully vested but unexercised nil-cost options
(valued on a net of tax basis). Achievement against the guideline holding is calculated using the share price at 31 December 2023 of 95.55 pence.
78
888 HOLDINGS PLC PERFORMANCE GRAPH
The following graph shows 888’s performance*, measured by TSR, compared with the performance of the FTSE 250 Index. The Directors
consider that the FTSE 250 Index is the most appropriate comparator benchmark as it has been a member of this index for a significant
period of the time covered by the chart.
VALUE OF £100 STERLING IN 888 1/1/2014-31/12/2023 VS FTSE 250
FTSE 250
888 Holdings
300
250
200
150
100
50
31/12/2013 31/12/2014 31/12/2015 31/12/2016 31/12/2017 31/12/2018 31/12/2019 31/12/2020 31/12/2021
31/12/2022 31/12/2023
* 888 Holdings Plc Ordinary Shares of GBP 0.005 each, being the shares of the Company’s equity share capital whose listing or admission to dealing has
resulted in the Company falling within the definition of 'quoted company'.
TOTAL REMUNERATION HISTORY FOR CEO
The table below sets out the total single figure remuneration for the CEO over the last ten years with the annual bonus paid as a
percentage of the maximum and the percentage of long-term share awards where the performance period determining vesting ended in
the year.
2014
2015
2016
2017
2018
2019
Itai
Frieberger
2019
Itai
Pazner
2020
2021
2022
2023
Itai
Pazner
2023
Jon
Mendelsohn1
2023
Per
Widerström
Total remuneration
(£000s)
808
3,544
1,369
8,358
1,886
364
1,354 2,000 2,970
1,476
67
Annual bonus (%)
100% 100% 100% 100% 29.2%
74.6% 74.6% 92.5% 78.0% 0.0%
LTIP vesting (%)
0%
59% 100% 100% 73.8%
30.6% 30.6% 89.9% 88.5% 0.0%
0%
0%
475
N/A
N/A
333
0.0%
0.0%
1. Lord Mendelsohn did not participate in the annual bonus or LTIP while performing the role of Executive Chair. Total remuneration shown is in respect of the
period of his appointment as Executive Chair from 30 January 2023 to 15 October 2023 only.
2. Mr Widerström has not received any LTIP grant to date. The performance period for the 2021 LTIP ended on 31 December 2023 with the vesting level at 0%
of maximum.
79
ANNUAL REPORT & ACCOUNTS 2023 STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SUPPLEMENTARY INFORMATION
DIRECTORS’ REMUNERATION REPORT CONTINUED
PERCENTAGE CHANGE IN DIRECTOR REMUNERATION COMPARED TO THE AVERAGE FOR OTHER EMPLOYEES
The following table sets out the percentage change in salary, taxable benefits and annual bonus from financial year 2019 to 2023, for
Directors and employees of the Group, taken as a whole.
Change 2023 v 2022
Change 2022 v 2021
Change 2021 v 2020
Change 2020 v 2019
Base
Base
Base
Base
salary/fee Benefits
Bonus
salary/fee Benefits
Bonus
salary/fee Benefits
Bonus
salary/fee Benefits
Bonus
Per Widerström
Itai Pazner
Yariv Dafna
Mark Summerfield
Anne de Kerckhove
Lord Mendelsohn
Limor Ganot
Andria Vidler
Andrea Gisle
Joosen
Ori Shaked
Employees
N/A
N/A
N/A
0%
0%
78%
0%
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
-59%
N/A
N/A
-37%
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
0%
N/A
4%
9%
28%
28%
22%
3%
N/A
N/A
N/A
8%
N/A
N/A
749% -100%
-11% -100%
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
7% -100%
N/A
9%
N/A
4%
26%
N/A
N/A
N/A
N/A
N/A
-2%
N/A
10%
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
-1%
N/A
23%
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
-14%
N/A
4%
N/A
N/A
12%
N/A
N/A
N/A
N/A
N/A
0%
N/A
-2%
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
-7%
N/A
29%
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
88%
1. Notes relating to prior years can be found in the relevant year’s report.
2. Per Widerström was appointed as CEO on 16 October 2023.
3. Itai Pazner stepped down from the Board on 30 January 2023.
4. Yariv Dafna stepped down from the Board on 2 October 2023.
5. Lord Mendelsohn received an increased fee for the duration of his appointment as Executive Chair in 2023.
5. Andria Vidler stepped down from the Board on 30 September 2023.
6. Employee numbers have been calculated on a per average head count basis across the combined group. Data for 2022 was previously stated excluding
William Hill employees and has not been restated. Significant decrease in pay is primarily a result of the inclusion of large retail headcount in the UK and
customer operations in the Philippines.
Bonus only includes annual performance bonus payable to colleagues in April in respect of the previous financial year. No bonus is payable in respect of
FY23.
CEO PAY RATIO
Year
2023
2022
2021
2020
2019
Salary
Total pay and benefits
Method 25th Percentile 50th Percentile
75th Percentile
B
A
A
A
A
1:39
1:22
1:62
1:33
1:25
1:33
1:18
1:48
1:26
1:19
1:28
1:13
1:35
1:19
1:15
CEO 25th Percentile 50th Percentile
75th Percentile
£684,000
£875,000
£20,509
£22,235
£24,107
£26,642
£28,666
£31,654
The table above sets out the CEO pay ratio for 2019 to 2023. For 2023 the comparison has moved from the Israel workforce to the UK
workforce. Ratios have been calculated following the methodology in Option B as this is the most meaningful method of calculation for the
UK workforce based on the availability of data at the time of calculation.
The increase in ratio is a result of the change in comparator group, with UK employees at the 25th, 50th and 75th percentile all being roles
in our UK retail estate. This has been offset by the decrease in CEO pay as a result of no bonus for 2023 and no vesting LTIP award. The
remuneration for the CEO represents the total of remuneration paid to Mr Pazner as former CEO, Lord Mendelsohn as Executive Chairman
and Mr Widerström as our new CEO during 2023.
The reward policies and practices for all employees across the Group are broadly aligned to those set for the Executive Directors including
the CEO, recognising that for some employee groups (including UK retail) a tailored approach is required to reflect the talent market. On
this basis, the Committee is satisfied that the median pay ratio is consistent with the pay, reward and progression policies across the UK
workforce.
80
888 HOLDINGS PLC RELATIVE IMPORTANCE OF SPEND ON PAY 2023 V 2022
350
300
250
200
150
100
50
0
119
109
FY22
+37%
313
FY23
888
William Hill
0
FY22
0
FY23
Employee pay and benefits
Dividends
The graph above sets out the actual expenditure by 888 in financial years 2022 and 2023 on dividends and remuneration to Group
employees.
The calculation of the comparables is as set out in the 2023 Consolidated Income Statement and Notes to the Financial Statements. For
FY22 the remuneration spend is split between 888 and William Hill to be consistent with the previous year’s report. Remuneration spend is
shown for the full Group for FY23 with the comparison based on combined spend in FY22.
COMMITTEE MEMBERS, ATTENDEES AND ADVICE
The Remuneration Committee consists solely of Non-Executive Directors. Ms Andrea Gisle Joosen chairs the Committee and Committee
members at the end of the year were Ms Anne de Kerckhove and Ms Limor Ganot. Mr Mark Summerfield was a member of the Committee
from 1 January 2023 to 26 September 2023. Details of attendance at Committee meetings are contained in the statement on Corporate
Governance on page 46. The Chair of the Board attends meetings by invitation. Members of the management team attend meetings by
invitation, and where appropriate, but no individual is present when their own specific remuneration arrangements are determined.
The Remuneration Committee’s remit is set out in its Terms of Reference which are available at https://corporate.888.com/who-we-are/
governance/board-committees/.
REMUNERATION COMMITTEE ADVISER
Korn Ferry was appointed Remuneration Committee adviser to 888 on 30 November 2018 following a tender process.
The primary role of the adviser to the Committee is to provide independent and objective advice and support to the Committee’s Chair
and members. Korn Ferry has discussions with the Committee Chair on a regular basis to discuss executive and wider group remuneration
matters, reporting, regulation, investor views and process. The Committee undertakes due diligence periodically to ensure that its advisers
remain independent and is satisfied that the advice that it receives from Korn Ferry is objective and independent. Korn Ferry is a signatory
to the Remuneration Consultants Group Code of Conduct which sets out guidelines for managing conflicts of interest and has confirmed to
the Committee its compliance with the Remuneration Consultants Group Code.
The total fees paid to Korn Ferry in respect of its services to the Committee for the year ending 31 December 2023 were £100,000 (2022:
£120,000). Fees are charged on a ‘time spent’ basis.
ENGAGEMENT
The Committee includes as part of its annual agenda consideration and review of workforce policies and practices and invites members of
the management team to attend Committee meetings to provide input into the Committee’s considerations. A key part of the Chief People
Officer’s role, supported by the CEO and the Non-Executive Director for engagement, is to engage with the wider workforce, with views and
feedback on remuneration provided to the Committee and wider Board. The approach to workforce engagement has been reviewed for
2024 and an engagement plan will be led by the designated Director for workforce engagement, Ms Anne de Kerckhove, with the Chief
People Officer and supported by the Chair of the Board.
81
ANNUAL REPORT & ACCOUNTS 2023 STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SUPPLEMENTARY INFORMATION
DIRECTORS’ REMUNERATION REPORT CONTINUED
The Committee is committed to having a transparent and constructive dialogue with our investors and consults with its investors to seek
feedback on any proposed policy changes and significant operation of policy changes. In early 2024, the Remuneration Committee Chair
carried out engagement with investors to discuss the business's overall approach to remuneration and the new policy to be brought to the
2024 AGM for approval.
STATEMENT OF SHAREHOLDER VOTING AT AGM
For
Against
Withheld
Advisory vote to approve Annual Report on
Remuneration (at 2023 Annual General Meeting)
Advisory vote to approve Remuneration Policy
(at 2021 Annual General Meeting)
Total number of votes
% of votes cast
Total number of votes
% of votes cast
213,768,154
13,059,458
1,958
94.24%
5.76%
215,388,197
69,066,028
2,757,202
75.72%
24.28%
82
888 HOLDINGS PLC DIRECTORS’ REPORT
The Directors’ Report for the
year ended 31 December
2023 comprises pages 83
to 89 of this report, together
with the sections of the
Annual Report incorporated
by reference. The Corporate
Governance Report set
out on pages 46 to 51 is
incorporated by reference
into this report and,
accordingly, should be read
as part of this report.
As permitted by legislation, some of the
matters required to be included in the
Directors’ Report have instead been included
in the Strategic Report on pages 2 to 43, as
the Board considers them to be of strategic
importance.
Specifically, these are:
• the Strategic framework on pages 6 to
8, which provides detailed information
relating to the Group, its business model
and strategy, operation of its businesses,
future developments and the results and
financial position for the year ended
31 December 2023;
• future business developments (throughout
the Strategic Report);
• details of the Group’s policy on addressing
the principal risks and uncertainties
facing the Group, which are set out in the
Strategic Report on pages 30 to 41;
• information on the Group’s GHG emissions
for the year ended 31 December 2023,
contained within our TCFD section and on
page 19; and
• how we have engaged with our
stakeholders on pages 22 to 23.
Furthermore, as a company incorporated
in Gibraltar, 888 Holdings Plc is not required
by UK law or regulation to prepare the
Directors’ Remuneration or Strategic
Reports under regulation that applies to UK
incorporated companies. However, by virtue
of 888’s Premium Listing on the London
Stock Exchange and reflecting the Directors’
approach to good governance and investor
expectation, we have prepared these
reports in line with the requirements under
the UK Companies Act 2006.
The Directors’ Remuneration Report, set
out on pages 66 to 82, has been voluntarily
prepared in accordance with sections 420
to 422 UK Companies Act 2006.
The information given in the Strategic
Report, set out on pages 2 to 43, has been
voluntarily prepared in accordance with
section 414 UK Companies Act 2006.
RESULTS
The Group’s loss after tax for the financial
year of £56.4 million (2022: £120.6 million
loss) is reported in the Consolidated Income
Statement on page 100.
The Board of Directors is not recommending
a final dividend to be paid, in light of the
Group’s leverage position following the
acquisition of William Hill and consistent with
its previous announcements.
DIRECTORS AND THEIR INTERESTS
Biographical details of the current Board
of Directors, setting out their relevant skills
and experience and their professional
commitments, are shown on pages 44
and 45.
The Directors who served during the
year are shown below. In line with the
UK Corporate Governance Code and as
required by the Company’s Memorandum
& Articles of Association ('Articles'), all
Directors retire at each Annual General
Meeting and those who wish to continue to
serve offer themselves for re-election.
• Lord Mendelsohn (first appointed
23 September 2020 as Chair Designate,
appointed as Chair on 31 March 2021
and appointed as Executive Chair on
29 January 2023, returning to Chair
on 16 October 2023).
• Per Widerström (first appointed
16 October 2023).
• Yariv Dafna (first appointed 1 November
2020, stepped down 2 October 2023).
• Mark Summerfield (first appointed
5 September 2019).
• Anne de Kerckhove (first appointed
28 November 2017).
• Limor Ganot (first appointed 1 August
2020).
• Andria Vidler (first appointed 5 July 2022,
stepped down 30 September 2023).
• Andrea Gisle Joosen (first appointed 5 July
2022).
• Ori Shaked (first appointed 13 September
2022).
The beneficial and non-beneficial interests
of the Directors and their closely associated
persons (pursuant to Article 19 of the
European Market Abuse Regulation) in
shares of the Company are set out in the
Directors’ Remuneration Report on pages 66
to 82. Per Widerström and Lord Mendelsohn
purchased shares during the year, details
of which can be found in the Remuneration
Report. There have been no further changes
in the interests of Directors in shares of
the Company between 31 December 2023
and 29 February 2024 which is the last
practicable date prior to the release of
this Report. None of the Directors had any
interests in any other material contract or
arrangement with the Company or any of its
subsidiaries.
SHARE CAPITAL
Changes in share capital of the Company
during the financial year are given in the
Consolidated Statement of Changes in
Equity. As at 31 December 2023, the issued
share capital of the Company comprised
449,045,257 ordinary shares of GBP £0.005
each ('Ordinary Shares').
At the Annual General Meeting held in May
2023, the Board was empowered to allot
equity securities of the Company for cash
without application of pre-emptive rights
under the Articles, provided that such power
is limited:
• to the allotment of equity securities in
connection with an offer or issue of equity
securities to or in favour of:
(i) Ordinary Shareholders where
the equity securities respectively
attributable to the interests of
all Ordinary Shareholders are
proportionate (as nearly as may be)
to the respective numbers of Ordinary
Shares held by them; and
(ii) holders of other equity securities if
this is required by the rights of those
securities, or if the Directors consider
it necessary, as permitted by the
rights of those securities; so that the
Directors may make such exclusions or
other arrangements as they consider
expedient in relation to treasury
shares, fractional entitlements,
record dates, shares represented by
depositary receipts, legal or practical
problems under the laws in any
territory or the requirements of any
relevant regulatory body or stock
exchange or any other matter;
83
ANNUAL REPORT & ACCOUNTS 2023 STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SUPPLEMENTARY INFORMATION
DIRECTORS’ REPORT CONTINUED
SHARE CAPITAL CONTINUED
• to the allotment (otherwise than pursuant
to sub-paragraphs (a) above and (c)
below) of equity securities up to an
aggregate nominal value of £111,794.03;
and
• to the allotment (otherwise than pursuant
to sub-paragraphs (a) and (b) above)
of equity securities in connection with an
acquisition or specified capital investment
up to an aggregate nominal value of
£111,794.03;
(ii) 30 June 2024, unless previously renewed,
varied or revoked by the Company at
a general meeting; and a contract to
purchase shares under the authority
may be made prior to the expiry of the
authority, and concluded in whole or in
part after the expiry of the authority,
and the Company may purchase its
ordinary shares in pursuance of any
such contract. In 2023, the Company did
not seek to exercise any of the foregoing
powers and authorities.
• and shall expire upon the earlier of:
(i) the conclusion of the next Annual
RIGHTS ATTACHING TO ORDINARY
SHARES IN THE COMPANY
General Meeting of the Company after
passing the resolution, save that the
Company may before such expiry
make an offer or agreement which
would or might require equity securities
to be allotted after such expiry and
the Board may allot equity securities
in pursuance of such an offer or
agreement as if the power conferred
thereby had not expired; and
(ii) 30 June 2024.
In paragraph (c) 'specified capital
investment' means one or more specific
capital investments in respect of which
sufficient information regarding the effect of
the transaction on the Company, the assets
the subject of the transaction and (where
appropriate) the profits attributable to those
assets is made available to shareholders to
enable them to reach an assessment of the
potential return.
SHARE BUY-BACK AUTHORITY
At the Annual General Meeting held in May
2023, the Board was authorised to make
market purchases of up to 44,717,615 of its
ordinary shares at a minimum price per
share (exclusive of expenses) of £0.005
and a maximum price per share (exclusive
of expenses) of the highest of 105% of the
average of the middle market quotations
of an ordinary share in the Company as
derived from the London Stock Exchange
Daily Official List for the five business days
immediately preceding the day on which
the ordinary share is contracted to be
purchased, the price of the last independent
trade of an ordinary share, and the highest
current independent bid for an ordinary
share in the Company as derived from the
London Stock Exchange Trading System.
The authority expires upon the earlier of:
(i) the conclusion of the next Annual
General Meeting of the Company; and
The rights and obligations attaching to
ordinary shares are set out in the Articles.
Holders of Ordinary Shares are entitled to
attend and speak at general meetings, to
appoint one or more proxies and to exercise
voting rights.
Holders of Ordinary Shares may receive
a dividend and on liquidation may share
in the Company’s assets. Holders of
Ordinary Shares are entitled to receive the
Annual Report. Subject to meeting certain
thresholds, holders of Ordinary Shares
may requisition a general meeting or the
proposal of resolutions at general meetings.
RESTRICTIONS ON TRANSFER OF SHARES
AND LIMITATIONS ON HOLDINGS
There are no restrictions on transfer or
limitations on the holding of Ordinary Shares
other than under restrictions imposed by law
or regulation (for example, insider trading
laws) or pursuant to the Company’s share
dealing code.
REQUIREMENTS OF GAMING
REGULATIONS
Many jurisdictions where the Group
currently holds, or in the future may
secure a licence, require any person who
acquires beneficial ownership of more
than a certain percentage (typically 5%,
and in some cases a smaller percentage)
of the Company’s securities, to report the
acquisition to the gaming authorities and
apply for a finding of suitability. Many
gaming authorities allow an 'institutional
investor' to apply for a waiver that allows
such institutional investor to acquire up to
a certain percentage of securities without
applying for a finding of suitability, subject
to the fulfilment of certain conditions. In
some jurisdictions, suitability investigations
may require extensive personal and financial
disclosure. The failure of any such individuals
or entities to submit to such background
checks and provide the required disclosure
could jeopardise the Group’s eligibility
for a required licence or approval.
The criteria used by relevant regulatory
authorities to make determinations as to
suitability of an applicant for licensure varies
from jurisdiction to jurisdiction, but generally
require the submission of detailed personal
and financial information followed by a
thorough investigation. Gaming authorities
have very broad discretion in determining
whether an applicant (corporate or
individual) qualifies for licensing or should be
found suitable.
Any person who is found unsuitable by a
relevant gaming authority may be prohibited
by applicable gaming laws or regulations
from holding, directly or indirectly,
the beneficial ownership of any of the
Company’s securities.
The Articles include provisions to ensure that
the Company has the required powers to
continue to comply with applicable gaming
regulations.
These provisions include providing the
Company, in the event of a Shareholder
Regulatory Event (as defined in the Articles),
with the right to:
(a) suspend certain rights of its members
who do not comply with the provisions
of the gaming regulations (the Affected
Members);
(b) require such Affected Members to
dispose of their Ordinary Shares; and
(c) subject to (b) above, dispose of the
Ordinary Shares of such Affected
Members.
The Company considers that these rights
are required in order to mitigate the risk that
an interest in Ordinary Shares held by a
particular person could lead to action being
taken by a relevant regulatory authority
(as defined in the Articles) which in turn
could lead to the withdrawal of existing
licences held by the Group or the exclusion
of being awarded further licences in other
jurisdictions that the Group seeks to pursue.
This potential regulatory authority action
could therefore cause substantial damage
to the Group’s business or prospects.
ENTITIES HOLDING COMPANY SHARES ON
BEHALF OF GROUP EMPLOYEES
At 31 December 2023, Virtual Share Services
Limited (a wholly owned subsidiary of the
Company) held 1,260,958 Ordinary Shares
in its administrative capacity in connection
with the 888 Holdings plc Long Term
Incentive Plan 2015 and Deferred Share
Bonus Plan. Full details are set out on pages
145 and 146.
84
888 HOLDINGS PLC
SUBSTANTIAL SHAREHOLDINGS
The Company has been notified of the following interests in 5% or more of its share capital under Disclosure Guidance and Transparency
Rules (DTR) Rule 5 of the UK Financial Conduct Authority:
Principal shareholders
As at 29 December 2023 (the last day of trading in 2023)
Salix Trust Company (BVI) Limited in trust on behalf of Dalia Shaked
Parvus Asset Management LLP (UK)
HG Vora Capital Management LLC (US)
Artemis Fund Managers Limited (UK)
Following 29 December 2023 and 29 February 2024 which is the latest practicable date
prior to publication of this Annual Report
Salix Trust Company (BVI) Limited in trust on behalf of Dalia Shaked
Parvus Asset Management LLP (UK)
Artemis Fund Managers Limited (UK)
Helikon Investments (UK)
HG Vora Capital Management LLC (US)
Other than as stated above, between
29 December 2023 and 29 February 2024
which is the last practicable date prior to
the publication of this Annual Report, no
further notifications were received regarding
holdings comprising 5% of the Company’s
issued share capital. Information provided
to the Company pursuant to the DTRs
is publicly available via the regulatory
information services and the Company’s
corporate website corporate.888.com.
SHAREHOLDER AGREEMENTS AND
CONSENT REQUIREMENTS
There are no known arrangements under
which financial rights are held by a person
other than the holder of the shares.
Relationship Agreement
The Company is a party to a relationship
agreement with, among others, Salix Trust
Company (BVI) Limited as trustee for Dalia
Shaked ('DS Trust') dated 14 September
2005 which was amended on 16 July 2015
(the 'Amended Relationship Agreement').
The O Shaked Shares Trust and the Ben
Yitzhak Family Shares Trust (together with
Dalia Shaked Bare Trust, the 'Principal
Shareholder Trusts') are also party to the
Amended Relationship Agreement but
are no longer bound by certain material
provisions since they are no longer
shareholders of the Company.
The Amended Relationship Agreement
includes the following provisions in respect
of the independence of the Company (in
accordance with the UK Listing Rules) which
provide that DS Trust shall, and shall procure
as far as it is legally able, that its respective
associates:
• conduct all transactions and relationships
with 888 Holdings Plc and any member of
the Group on an arm’s length basis and
on a normal commercial basis;
• not take any action which precludes or
inhibits 888 Holdings Plc, or any member
of the Group, from carrying on its business
independently of it;
• not take any action that would have the
effect of preventing the Company, or any
member of the Group, from complying
with its obligations under the UK Listing
Rules; and
• not propose or procure the proposal
of any shareholder resolution which is
intended, or appears to be intended, to
circumvent any proper application of the
UK Listing Rules.
It further provides that the DS Trust will not
solicit Group employees without consent,
that only independent directors can
vote on proposals to further amend the
Amended Relationship Agreement, that the
DS Trust will consult the Company prior to
disposing of a significant number of shares
in order to maintain an orderly market and
shall not disclose confidential information
unless required to do so by law or relevant
regulation or having first received the
Company’s consent.
The Amended Relationship Agreement also
includes restrictions on the DS Trust’s power
to appoint Directors and includes obligations
on the DS Trust to exercise its voting rights
to ensure that the majority of the Board,
excluding the Chair, is independent.
Applicable
financial
instruments
86,283,534
44,584,872
23,945,000
22,909,343
86,283,534
44,103,321
27,518,343
24,636,482
23,945,000
% issued
share capital
Nature of
holding
19.23
9.94
5.34
5.11
19.21
9.82
6.13
5.49
5.33
Indirect
Indirect
Indirect
Indirect
Indirect
Indirect
Indirect
Indirect
Indirect
The DS Trust can nominate a non- executive
director for appointment to the Board.
In the event that this right is exercised,
and it results in fewer than half the Board
(excluding the Chair of the Board) being
Independent Directors, such appointment
shall only become effective upon the
appointment to the Board of an additional
Independent Director acceptable to the
Nominations Committee. The DS Trust
exercised this right in July 2022 and Ori
Shaked was appointed as a non-executive
director on 13 September 2022.
In line with the UK Corporate Governance
Code and as required by the Company’s
Memorandum & Articles of Association
('Articles'), Mr Shaked will retire at the 2024
Annual General Meeting and offer himself for
re-election.
Such restrictions and obligations apply
in respect of the DS Trust whilst it holds not
less than 7.5% of the issued share capital
of the Company.
The obligations of the parties to the
Amended Relationship Agreement are at
all times subject to all relevant legal and
regulatory requirements and obligations of
the parties thereto in the United Kingdom,
Gibraltar or elsewhere.
Confirmation of independence
The Board confirms that as of the date of
this Annual Report, and during the entirety
of 2023, the Company had no controlling
shareholder. Therefore, no confirmation of
independence is required pursuant to UK
Listing Rule 9.8.4 R (14).
Shareholders’ agreements
There are no known shareholders’
agreements in force between shareholders
of the Company.
85
ANNUAL REPORT & ACCOUNTS 2023 STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SUPPLEMENTARY INFORMATION
DIRECTORS’ REPORT CONTINUED
CHANGE OF CONTROL
FINANCIAL INSTRUMENTS
A change of control in the Company may,
in the event of failure to fulfil any applicable
consent requirement, give rise to certain
revocation or termination rights under the
Group’s gaming licences or certain contracts
to which Group companies are a party.
POLITICAL DONATIONS
In accordance with its Political Involvement
Policy which is available on the corporate
website, the Group did not make any
donations to any political party (including
any non-EU political party) or organisation
or independent election candidate or incur
any political expenditure during the year.
POLITICAL INVOLVEMENT AND ANTI-
CORRUPTION ACTIVITIES
The Group has a zero-tolerance approach
to bribery and corruption and complies
strictly with all relevant laws. The Group
has adopted an Anti-Bribery Policy which
applies to all employees and is overseen
by the Board. The policy includes the
Group’s rules with regard to the giving
and receiving of gifts, business hospitality
and other payments, with particular focus
on transactions with government-related
entities and intermediaries. The policy can
be read in full on the Group’s corporate
website and was updated in March 2024.
The Group carries out a comprehensive
due diligence process of potential high-risk
business associates, which includes certain
government-related transactions and certain
intermediaries. The Group also clearly
communicates its policy to its suppliers and
employees and carries out staff training on
the topic.
During 2023, no instances of non-
compliance with the policy arose, and
no fines, penalties or settlements were
received or entered into in connection
with bribery and corruption matters. We
have also adopted a Political Involvement
Policy, which is publicly available on the
corporate website. Under this policy, we do
not generally engage in political matters
other than lawful lobbying in connection with
our business. The Group was not involved
in political matters and did not make fiscal
contributions.
Respecting local tax regimes and paying our
fair share is a fundamental responsibility of
the Company to the communities on which
we rely. Further information on our wider
contributions to communities is included
in our ESG and Sustainability Report. As
a Group our economic contribution is
significant, including a total tax contribution
of £529m in 2023.
The Board considers the Group’s exposure to
financial risks as part of its risk management
strategy. Further details can be found in the
Risk Management section of this report on
page 38. In order to finance the acquisition
of William Hill, the Company took on
significant debt.
Hedging arrangements were put in place
in order to fix around 70% of interest costs
for the next two years. The Group is also
exposed to foreign exchange as the Group’s
deposits and revenues are generated in GBP,
EUR and other currencies, whilst the Group’s
operating expenses are largely incurred in
local currencies.
The Group has mitigated foreign exchange
risk by adopting policies to hedge certain
costs in GBP. The Group has also entered
into FX or cross-currency swaps in order
to hedge part of its ongoing USD and EUR
exposure arising due to the acquisition
financing and its ongoing EUR exposure
under outstanding notes. Forward deals are
also in place to hedge ILS against revenue in
Canadian Dollars and GBP.
The Board reviews these risks on an ongoing
basis with a view to taking such action
as required from time to time. Further
information on the Group’s use of financial
instruments is set out in note 25 to the
annual accounts on pages 140 and 143.
DIRECTORS’ INDEMNITIES
The Articles permit the Company
to indemnify its Directors in certain
circumstances, as well as to provide
insurance for the benefit of its Directors.
The Company has entered into qualifying
third-party indemnity arrangements for the
benefit of all of its Directors in a form and
scope which comply with the requirements
of the UK Companies Act 2006 and the
Gibraltar Companies Act 2014 which
were in force from 1 November 2017 (or
subsequently, with respect to subsequently
appointed directors) and remain in force.
GOING CONCERN AND VIABILITY
STATEMENTS
The going concern and viability statements
required to be included in the Annual Report
pursuant to the UK Corporate Governance
Code are on pages 105 and 42 respectively
and are incorporated in this Directors’
Report by reference.
PRINCIPAL SUBSIDIARY UNDERTAKINGS
The principal subsidiary undertakings are
listed in note 33.
RESEARCH AND DEVELOPMENT
ACTIVITIES
Having first-class customer value
propositions is a key pillar of the Group’s
growth strategy, and as such, investment
in research and development is a critical
area of focus for the Group. Our mission is to
delight players with world-class betting and
gaming experiences, and the Group places
significant emphasis on the development
of best-in-class products that are easy to
use and offer personalised value. Further
details of the outputs of our research and
development activities this year are set out
on page 7.
POST-PERIOD EVENTS
On 6th March 2024, the Group announced
its decision to conclude its partnership
with Authentic Brands Group as part of the
strategic review of its B2C business. This
partnership had granted exclusive use of the
Sports Illustrated brand for online betting
and gaming. As part of the termination
agreement, the Group has agreed to pay
a fee of $25.0m, which will be paid in cash
from available resources. Additionally, the
Group will pay an extra $25.0m between
2027 and 2029.
On 22 March 2024, the GB Gambling
Commission (GBGC) informed the Group
that it had concluded its review into the
Group’s operating licences that was
announced by the Group on 14 July 2023.
The GBGC concluded the review without
imposing any licence conditions, financial
penalties or other remedies on the Group.
AUDIT & RISK COMMITTEE
The Board has established an Audit
Committee which became the Audit & Risk
Committee in 2023. Details of the Audit &
Risk Committee’s functions, together with its
specific activities in 2023, are set out in the
Audit & Risk Committee Report on pages 56
to 61.
During the year the Company’s Audit & Risk
Committee comprised Mark Summerfield
(Chair), and Independent Non-Executive
Directors Anne de Kerckhove, Andrea Gisle
Joosen and Limor Ganot.
Details of the Company’s risk management
strategy and the Board’s assessment of the
Group’s viability in light of its risks are set out
on pages 32 and 42 respectively.
86
888 HOLDINGS PLC AUDITORS
A resolution for the reappointment of
Ernst and Young LLP and EY Limited,
Gibraltar, (together, EY), as auditors of the
Company will be proposed at the 2024
Annual General Meeting.
During the year ended 31 December 2023,
the Company’s audit was tendered in
accordance with the EU Audit Regulation
and the Competition and Markets
Authority rules. The Company conducted
a competitive tender process in respect of
auditor appointment in August 2023. Ernst
and Young LLP was reappointed as auditor
for the purposes of the Company preparing
financial statements as required pursuant
to the UK Listing Rules and the DTRs. EY
Limited, Gibraltar, which is approved as
a registered auditor under the Gibraltar
Financial Services Act 2019, is the statutory
auditor of the Company including for the
purposes of issuing an audit report pursuant
to the Gibraltar Companies Act 2014.
Details of audit and non-audit fees charged
by EY to the Company are set out in note 5
to the financial statements.
RISK MANAGEMENT AND INTERNAL
CONTROL
The Board acknowledges that it is
responsible for the Company’s system of
internal control, for setting policy on internal
control and risk management, and for
reviewing the effectiveness of internal control
and risk management.
On 16 October 2023 the Company
announced that the Audit Committee
would become the Audit & Risk Committee
by virtue of the formal delegation of risk
management activities from the Board.
The Audit & Risk Committee monitors the
Group’s systems of internal control and risk
management on an ongoing basis, including
identifying, evaluating and managing the
significant risks faced by the Group. The
Audit & Risk Committee is required to report
pertinent matters to the Board at scheduled
Board meetings, with urgent matters being
shared in real time. Significant developments
have been made in 2023 to embed a culture
of risk management across the Group
through the establishment of an Enterprise
Risk Management Framework. Further details
are included in the Risk section on pages 30
to 41.
The Board believes that its risk management
process accords with the FRC Guidance
on Risk Management, Internal Control and
Related Financial and Business Reporting
and carries out an annual review of its
effectiveness covering all material controls,
including financial, operational
and compliance controls.
The annual review considers individual risk
control responsibilities, reporting lines and
qualitative assessments of residual risks.
Such a review was carried out in respect of
the processes that were in place throughout
2023 up until the date of approval of the
Annual Report and Accounts. No significant
failings or weaknesses were identified in
the review.
It is management’s role to implement
Board policies on risk and control, including
reporting. The system of internal control is
designed to manage rather than eliminate
the risk of failure to achieve business
objectives and can only provide reasonable,
and not absolute, assurance against
material misstatement or loss.
The Audit & Risk Committee also reviews the
appropriateness and adequacy of systems
of internal control and risk management
in relation to the financial reporting
process on an ongoing basis and makes
recommendations to the Board based on its
findings.
The Group’s internal control and risk
management systems in relation to the
process of preparing consolidated accounts
include the following:
• Identification of significant risk and
control areas of relevance to Group-wide
accounting processes;
• Controls to monitor the consolidated
accounting process and its results at the
level of the Board and at the level of the
companies included in the consolidated
financial statements;
• Preventative control measures in the
finance and accounting systems of the
Company and of the companies included
in the consolidated financial statements
and in the operative, performance-
oriented processes that generate
significant information for the preparation
of the consolidated financial statements
including the Strategic Report, including
a separation of functions and pre-defined
approval processes in relevant areas;
• Measures that safeguard proper IT-based
processing of matters and data relevant
to accounting; and
• Reporting information of companies
around the Group which enable the
Company to prepare consolidated
financial statements including
management accounts.
The reporting structure relating to all the
companies included in the consolidated
financial statements requires that significant
risks are to be reported immediately to the
Board on identification.
WHISTLEBLOWING POLICY
The Group’s Whistleblowing Policy sets
out the overall responsibility of the Board
(through its Audit & Risk Committee) for
implementation of the policy, but notes
that the Board has delegated day-
to-day responsibility for oversight and
implementation to the Group Internal Audit
function with additional oversight from the
Group Legal and Compliance functions.
The policy provides that where an employee
is not comfortable making an identified
disclosure in the standard manner (i.e. to
his/her respective direct line manager,
another manager in his/her subsidiary,
the People department or the compliance
manager), disclosure can be made
anonymously through a third party, Navex,
and reporters can either raise their case via
online forms or dedicated phone numbers.
Whilst employees are permitted to make
disclosures anonymously, disclosing
employees are encouraged to reveal their
identity to the compliance officer in order
to allow a full and proper investigation to
take place. Where a disclosing employee’s
identity is revealed, the Group will make its
best effort, considering the circumstances
and applicable law, to preserve
confidentiality of such disclosure. The Board
commits to investigating all disclosures fully,
fairly, quickly and, where circumstances
permit, confidentially. Undertakings are
made to employees who raise genuinely
held concerns in good faith under the
procedure that they will not be dismissed or
subject to any discrimination or victimisation
as a result of their action. Employees of the
Group are regularly sent reminders regarding
the Whistleblowing Policy as part of general
refreshers of various Group policies.
REMUNERATION COMMITTEE
The Board has overall responsibility for
determining the framework of executive
remuneration and its cost. It is required
to take account of any recommendation
made by the Remuneration Committee in
determining the remuneration, benefits and
employment packages of the Executive
Directors and Executive Committee and the
fees of the Chair.
During the year the Company’s
Remuneration Committee comprised
Independent Non-Executive Directors
Andrea Gisle Joosen (Chair from 23 May
2023) Anne de Kerckhove, Mark Summerfield,
and Limor Ganot.
87
ANNUAL REPORT & ACCOUNTS 2023 STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SUPPLEMENTARY INFORMATION
DIRECTORS’ REPORT CONTINUED
• in respect of the parent company financial
statements, state whether UK adopted
international accounting standards in
conformity with the requirements of the
Gibraltar Companies Act 2014 have
been followed, subject to any material
departures disclosed and explained in the
financial statements; and
• prepare the financial statements on
the going concern basis unless it
is appropriate to presume that the
Company and/or the Group will not
continue in business.
The Directors are responsible for keeping
adequate accounting records that
are sufficient to show and explain the
Company’s and Group’s transactions
and disclose with reasonable accuracy
at any time the financial position of the
Company and the Group and enable
them to ensure that the Company and the
Group financial statements comply with
the Gibraltar Companies Act 2014. They
are also responsible for safeguarding the
assets of the Group and parent company
and for taking reasonable steps for the
prevention and detection of fraud and other
irregularities.
Under applicable law and regulations,
the Directors are also responsible for
preparing a strategic report, Directors’
report, Directors’ remuneration report and
corporate governance statement that
comply with that law and those regulations.
The Directors are responsible for the
maintenance and integrity of the corporate
and financial information included on the
Company’s website.
REMUNERATION COMMITTEE CONTINUED
The Remuneration Committee determines
the Chair’s and Executive Directors’ fees,
whilst the Chair and the Executive Directors
determine the fees paid to the Non-
Executive Directors. Further details are
provided on page 75.
The Remuneration Committee was advised
during 2023 by Korn Ferry. The remuneration
consultant has no other connection with 888
or any of the Directors. Further details are
provided on page 81.
All new long-term incentive schemes
and significant changes to existing long-
term incentive schemes are put to the
shareholders of the Company for approval
before they are adopted (save for certain
circumstances as set out in the Listing Rules).
The Directors' Remuneration Policy will
be put to a vote at the Annual General
Meeting in May 2024 in accordance with
the Companies (Directors’ Remuneration
Policy and Directors’ Remuneration Report)
Regulations 2019. Details of the policy can
be found on pages 66 to 73.
The Remuneration Committee Report and
Directors' Remuneration Report, which
outlines the Remuneration Committee’s
work and details of Directors’ remuneration,
is on pages 62 to 82. The Remuneration
Committee’s terms of reference are available
on the Company’s website, corporate.888.
com.
COMPLIANCE WITH STATUTORY
PROVISIONS
As the Company is registered in Gibraltar,
it is subject to compliance with Gibraltar
statutory requirements. The main corporate
legislation relevant to the Company in
Gibraltar is the Gibraltar Companies Act
2014. The Company is in full compliance with
the Gibraltar Companies Act.
DIVIDEND POLICY
The Company’s policy, as stated in its
IPO Prospectus, is to distribute 50% of its
adjusted profit after tax each year. On
7 April 2022 it was announced that the
Board intends to suspend dividends until
such time that net leverage is at or below
3x. During 2023, this threshold was not met
and as such the payment of a dividend
will not be proposed at the 2024 Annual
General Meeting.
DIRECTORS’ STATEMENT OF
RESPONSIBILITIES
The Directors are responsible for preparing
the Annual Report and the financial
statements in accordance with applicable
Gibraltar law and regulations.
Company law requires the Directors to
prepare financial statements for each
financial year. Under that law, the Directors
have elected to prepare the Group and
parent company financial statements in
accordance with UK adopted international
accounting standards in conformity with the
requirements of the Gibraltar Companies Act
2014. Under company law, the Directors must
not approve the financial statements unless
they are satisfied that they give a true and
fair view of the state of affairs of the Group
and the Company and of the profit or loss of
the Group and the Company for that period.
Under the Financial Conduct Authority’s
Disclosure Guidance and Transparency
Rules, Group financial statements are
required to be prepared in accordance
with UK adopted international accounting
standards.
In preparing these financial statements the
Directors are required to:
• select suitable accounting policies in
accordance with IAS 8 Accounting
Policies, Changes in Accounting
Estimates and Errors and then apply them
consistently;
• make judgements and accounting
estimates that are reasonable and
prudent;
• present information, including accounting
policies, in a manner that provides
relevant, reliable, comparable and
understandable information;
• provide additional disclosures when
compliance with the specific requirements
in IFRSs is insufficient to enable users
to understand the impact of particular
transactions, other events and conditions
on the Group and Company financial
position and financial performance;
• in respect of the Group financial
statements, state whether international
accounting standards in conformity
with the requirements of the Gibraltar
Companies Act 2014 and UK adopted
international accounting standards have
been followed, subject to any material
departures disclosed and explained in the
financial statements;
88
888 HOLDINGS PLC DIRECTORS’ RESPONSIBILITY STATEMENT
(DTR 4.1)
The Directors confirm, to the best of their
knowledge:
• that the consolidated financial statements,
prepared in accordance with UK adopted
international accounting standards in
conformity with the requirements of
the Gibraltar Companies Act 2014 and
UK adopted international accounting
standards, give a true and fair view of
the assets, liabilities, financial position
and profit of the parent company and
undertakings included in the consolidation
taken as a whole;
• that the Annual Report, including the
Strategic Report, includes a fair review of
the development and performance of the
business and the position of the Company
and undertakings included in the
consolidation taken as a whole, together
with a description of the principal risks
and uncertainties that they face; and
• that they consider the Annual Report,
taken as a whole, is fair, balanced
and understandable and provides the
information necessary for shareholders
to assess the Company’s position,
performance, business model and
strategy.
All of the current Directors have taken all
the steps that they ought to have taken
as Directors to make themselves aware of
any information needed by the Company’s
auditors for the purposes of their audit, and
to establish that the auditors are aware of
that information. The Directors are not aware
of any relevant audit information of which
the auditors are unaware.
On behalf of the Board:
LORD MENDELSOHN
Chair
26 March 2024
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ANNUAL REPORT & ACCOUNTS 2023 STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SUPPLEMENTARY INFORMATION
INDEPENDENT AUDITOR’S REPORT
To the members of 888 Holdings PLC
OPINION
In our opinion:
• 888 Holdings PLC’s Group financial statements and Parent company financial statements (the 'financial statements') give a true and
fair view of the state of the Group’s and of the parent company’s affairs as at 31 December 2023 and of the Group’s loss for the year
then ended;
• the Group and Parent company financial statements have been properly prepared in accordance with UK adopted international
accounting standards; and
• the financial statements have been prepared in accordance with the requirements of the Gibraltar Companies Act 2014.
We have audited the financial statements of 888 Holdings PLC (the ‘parent company’) and its subsidiaries (the ‘group’) for the year ended
31 December 2023 which comprise:
GROUP
PARENT COMPANY
Consolidated Income Statement for the year ended 31
December 2023
Company Balance Sheet as at 31 December 2023
Consolidated Statement of Comprehensive Income for the year
then ended
Company Statement of Changes in Equity for the year then ended
Consolidated Statement of Financial Position as at 31
December 2023
Company Statement of Cash Flows for the year then ended
Consolidated Statement of Changes in Equity for the year then
ended
Related notes 1 to 9 to the financial statements including a
summary of significant accounting policies
Consolidated Statement of Cash Flows for the year then ended
Related notes 1 to 33 to the financial statements, including a
summary of significant accounting policies
The financial reporting framework that has been applied in their preparation is applicable law and UK adopted international accounting
standards and as regards the Group and Parent company financial statements, as applied in accordance with the provisions of the
Gibraltar Companies Act 2014.
BASIS FOR OPINION
We conducted our audit in accordance with International Standards on Auditing (ISAs) and applicable law. Our responsibilities under those
standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We believe
that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
INDEPENDENCE
We are independent of the Group and Parent company in accordance with the ethical requirements that are relevant to our audit of the
financial statements in the UK, including the FRC’s Ethical Standard as applied to listed public interest entities, and we have fulfilled our
other ethical responsibilities in accordance with these requirements.
The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the Group or the Parent company and we remain
independent of the Group and the Parent company in conducting the audit. We confirm that there are appropriate safeguards in place
and that we remain independent.
CONCLUSIONS RELATING TO GOING CONCERN
In accordance with the terms of our engagement letter with the Company, in auditing the financial statements, we have concluded that the
directors’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Our evaluation of the
directors’ assessment of the Group and parent company’s ability to continue to adopt the going concern basis of accounting included:
• We confirmed our understanding of 888’s going concern assessment process, including how principal and emerging risks are
considered. We understood the review controls in place for the going concern model, forecasting and management’s Board
memoranda;
• We challenged the appropriateness of the duration of the going concern assessment period and considered the existence of any
significant events or conditions beyond this period;
• We tested the mathematical integrity of management’s going concern model, including ensuring arithmetic accuracy;
• We performed procedures to test the reasonableness of cash flow forecast assumptions, through reconciliation to the budget
approved by the Board, comparison with recent performance and external benchmarking, as well as their consistency with other
areas of the audit including impairment assessments. We independently assessed other key assumptions including the timing and
quantum of legal and regulatory payments, the potential impact of interest rate and macroeconomic risks, the timing of settlement of
provisions and achievability of integration synergies;
90
888 HOLDINGS PLC CONCLUSIONS RELATING TO GOING CONCERN CONTINUED
• We read the Group’s facility and syndication agreements and re-calculated the financial covenant relating to the Group’s revolving
credit facility to check whether it remained available to the Group throughout the going concern period under the base case and
downside scenarios;
• We challenged management’s downside scenarios and reverse stress testing, including the mitigating actions included in the cash
flow forecasts. This included understanding the Group’s variable and discretionary costs and evaluating the Group’s ability to control
these outflows if required;
• We performed our own assessment of plausible downside scenario focussed on the timing of cash outflows not solely at the Group’s
discretion. We also performed a reverse stress test in order to assess the flexibility of the business model and identify what factors
would lead to the Group utilising all liquidity during the going concern period and the probability of such events of occurring; and
• We assessed the appropriateness of disclosures in the Annual Report and Accounts by comparing the disclosures against the
requirements under UK adopted international accounting standards and the UK Corporate Governance Code.
Key observations
• The directors’ assessment forecasts that the Group will maintain sufficient liquidity throughout the going concern assessment period
and does not forecast any breaches in debt covenants. This includes the utilisation of the Group’s revolving credit facility, which
remains undrawn as at 31 December 2023.
• The Group is exposed to certain legal and regulatory risks, some of which will result in cash outflows during the going concern
assessment period or will increase the uncertainty associated with cash inflows. However, even under the downside scenarios
described above, the directors’ assessment forecasts the Group to maintain liquidity and covenant headroom throughout the going
concern period.
• Controllable mitigating actions are available to management to increase liquidity over the going concern assessment period,
although some of these actions may impact the Group’s profitability and cash generation over a longer time horizon.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually
or collectively, may cast significant doubt on the Group and parent company’s ability to continue as a going concern for the period to 30
June 2025.
In relation to the Group and Parent company’s reporting on how they have applied the UK Corporate Governance Code, we have
nothing material to add or draw attention to in relation to the directors’ statement in the financial statements about whether the directors
considered it appropriate to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this
report. However, because not all future events or conditions can be predicted, this statement is not a guarantee as to the Group’s ability to
continue as a going concern.
OVERVIEW OF OUR AUDIT APPROACH
AUDIT SCOPE
• We performed an audit of the complete financial information of five components and
audit procedures on specific balances for a further five components.
• The components where we performed full or specific audit procedures accounted for
91% of adjusted EBITDA, 99% of Revenue and 98% of Total assets.
KEY AUDIT MATTERS
• Regulatory and legal risk
• Revenue recognition
• Impairment of goodwill
MATERIALITY
• Overall Group materiality of £6.2m, which represents 2% of Adjusted EBITDA (as
defined below in 'Our application of materiality' section).
AN OVERVIEW OF THE SCOPE OF THE PARENT COMPANY AND GROUP AUDITS
Tailoring the scope
Our assessment of audit risk, our evaluation of materiality and our allocation of performance materiality determine our audit scope for
each company within the Group. Taken together, this enables us to form an opinion on the consolidated financial statements. We take into
account size, risk profile, the organisation of the Group and effectiveness of group-wide controls, changes in the business environment, the
potential impact of climate change and other factors such as recent Internal audit results when assessing the level of work to be performed
at each component.
In assessing the risk of material misstatement to the Group financial statements, and to ensure we had adequate quantitative coverage of
significant accounts in the financial statements, of all the reporting components of the Group, we selected 10 components covering entities
within the UK, Gibraltar and Malta, which represent the principal business units within the Group.
91
ANNUAL REPORT & ACCOUNTS 2023 STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SUPPLEMENTARY INFORMATION
INDEPENDENT AUDITOR’S REPORT CONTINUED
To the members of 888 Holdings PLC
AN OVERVIEW OF THE SCOPE OF THE PARENT COMPANY AND GROUP AUDITS CONTINUED
Tailoring the scope continued
Of the 10 components selected, we performed an audit of the complete financial information of five components (“full scope components”)
which were selected based on their size or risk characteristics. For the remaining five components (“specific scope components”), we
performed audit procedures on specific accounts within that component that we considered had the potential for the greatest impact on
the significant accounts in the financial statements either because of the size of these accounts or their risk profile.
The reporting components where we performed audit procedures accounted for 91% (2022: 96%) of the Group’s Adjusted EBITDA, 99%
(2022: 99%) of the Group’s Revenue and 98% (2022: 96%) of the Group’s Total assets. For the current year, the full scope components
contributed 91% (2022: 125%) of the Group’s Adjusted EBITDA, 97% (2022: 99%) of the Group’s Revenue and 98% (2022: 94%) of the Group’s
Total assets. The specific scope component contributed 0% (2022: -29%) of the Group’s Adjusted EBITDA, 2% (2022: 0%) of the Group’s
Revenue and 0% (2022: 2%) of the Group’s Total assets. The audit scope of these components may not have included testing of all
significant accounts of the component but will have contributed to the coverage of significant accounts tested for the Group.
Of the remaining components that together represent 9% of the Group’s Adjusted EBITDA, none are individually greater than 1% of the
Group’s Adjusted EBITDA. For these components, we performed other procedures, including analytical review, testing of consolidation
journals and intercompany eliminations and foreign currency translation recalculations to respond to any potential risks of material
misstatement to the Group financial statements.
The charts below illustrate the coverage obtained from the work performed by our audit teams.
ADJUSTED
EBITDA
REVENUE
TOTAL ASSETS
Full scope components 91%
Full scope components 97%
Full scope components 98%
Specific scope components 0%
Specific scope components 2%
Specific scope components 0%
Other procedures 9%
Other procedures 1%
Other procedures 2%
Changes from the prior year
In the prior year, following the William Hill business combination, we selected eight components to perform an audit of their complete
financial information ("full scope components") based on size and risk characteristics. For the remaining component (“specific scope
component”), we performed audit procedures on specific accounts within that component that we considered had the potential for the
greatest impact on the financial statements due to size and risk. In the current year, following further integration of the William Hill business
into the Group, we evolved our scoping to focus on the key areas of audit risk within the Group's components, by increasing the number of
specific scope components. This had a limited effect on the level of work performed across the Group.
Involvement with component teams
In establishing our overall approach to the Group audit, we determined the type of work that needed to be undertaken at each of the
components by us, as the Group audit team, or by component auditors from other EY global network firms operating under our instruction.
Of the five full scope components and five specific scope components, audit procedures were performed on two full scope and four specific
scope components, directly by the group audit team in London and Gibraltar. For the remaining three full scope entities and one specific
scope component, where the work was performed by component auditors in Gibraltar and Malta, we determined the appropriate level of
involvement to enable us to determine that sufficient audit evidence had been obtained as a basis for our opinion on the Group as a whole.
The non-statutory audit partner has experience serving clients in a variety of public UK-listed companies, including those with the majority
of their operations overseas. The statutory audit partner has experience serving clients in a variety of industries in Gibraltar. They reviewed
the experience and expertise of the engagement team to ensure that the team had the appropriate competence and capabilities, which
included the use of a specialist where appropriate. The team had discussions during planning and throughout the audit in respect of the
evolving gaming regulatory environment.
The Group audit team continued to follow a programme of planned visits that has been designed to ensure that the Non-Statutory Auditor,
the Statutory Auditor and other Group partners visited full scope and specific scope locations. During the current year’s audit cycle, visits
were undertaken by the Group audit team to the component teams in Malta and Gibraltar. These visits involved discussing the audit
approach with the component team and any issues arising from their work, meeting with local management and reviewing relevant audit
working papers on risk areas. The Group audit team interacted regularly with the component teams where appropriate during various
stages of the audit, reviewed relevant working papers and were responsible for the scope and direction of the audit process. This, together
with the additional procedures performed at Group level, gave us appropriate evidence for our opinion on the Group financial statements.
92
888 HOLDINGS PLC
AN OVERVIEW OF THE SCOPE OF THE PARENT COMPANY AND GROUP AUDITS CONTINUED
Climate change
Stakeholders are increasingly interested in how climate change will impact 888 Holdings PLC. The Group has determined that the most
significant future impacts from climate change on its operations will be from coastal flooding due to sea level rise (with a safety and
infrastructure impact on people, offices and retail shops); temporary increases to the cost of living during the transition to low-carbon
technologies (with an impact on customers’ disposable income); and legislation introduced to place a ban on fossil fuel use for fuel and
energy generation and introduction of legislation to favour renewable energy generation (with an impact on energy costs and energy
security). These are explained on pages 163 to 175 in the required Task Force for Climate related Financial Disclosures and on pages 36 to
41 in the principal risks and uncertainties. It has also explained its climate commitments on pages 18 to 21. All of these disclosures form part
of the 'Other information,' rather than the audited financial statements. Our procedures on these unaudited disclosures therefore consisted
solely of considering whether they are materially inconsistent with the financial statements or our knowledge obtained in the course of the
audit or otherwise appear to be materially misstated, in line with our responsibilities on 'Other information'.
In planning and performing our audit we assessed the potential impacts of climate change on the Group’s business and any consequential
material impact on its financial statements.
The Group has explained on page 107 its articulation of how climate change has been reflected in the financial statements including how
this aligns with its commitment to achieve net zero emissions by 2035. Consideration of significant judgements and estimates relating to
climate change are included in note 1.
Our audit effort in considering the impact of climate change on the financial statements was focused on evaluating management’s
assessment of the impact of climate risk, physical and transition, its climate commitments, the effects of material climate risks disclosed on
pages 166 to 170 and the significant judgements and estimates disclosed in note 1 and whether these have been appropriately reflected in
the asset values and associated disclosures where values are determined through modelling future cash flows, being the impairment tests
of the Retail, UK online and International online groups of cash generating units.
We also challenged the Directors’ considerations of climate change risks in their assessment of going concern and viability and associated
disclosures. Where considerations of climate change were relevant to our assessment of going concern, these are described above. Based
on our work we have not identified the impact of climate change on the financial statements to be a key audit matter or to impact a key
audit matter.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of
the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we identified.
These matters included those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit; and
directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial statements as a
whole, and in our opinion thereon, and we do not provide a separate opinion on these matters.
93
ANNUAL REPORT & ACCOUNTS 2023 KEY OBSERVATIONS
COMMUNICATED TO THE
AUDIT AND RISK COMMITTEE
We concluded that the
provision and accruals
in respect to regulatory
authorities, and related
income statement accounts,
are appropriate and that
the disclosures of probable
and possible outflows in the
financial statements meet the
requirements of IAS 37 as at 31
December 2023.
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SUPPLEMENTARY INFORMATION
INDEPENDENT AUDITOR’S REPORT CONTINUED
To the members of 888 Holdings PLC
RISK
OUR RESPONSE TO THE RISK
Regulatory and legal risks
At 31 December 2023, the Group has
provided £116.4 million (2022: £143.2
million) in respect of ongoing legal
and regulatory matters principally
in Austria and Germany. A further
provision of £62.8 million (2022: £61.7
million) was made in relation to
indirect taxes.
Refer to the significant accounting
policies (Note 1 on pages 105 to
114); and Notes 22 and 31 to the
Consolidated Financial Statements
(page 132 and 133, and page 150).
Given the industry and jurisdictions in
which the Group operates there is a
risk that the Group operates without
the appropriate licences, has existing
licences adversely affected through
the imposition of licence conditions
or threat of licence revocation, or
is subject to regulatory sanctions
resulting from breaches of licence
conditions. There is also a risk that
the Group does not pay or accrue
for gaming taxes on an appropriate
basis.
Judgement is applied in estimating
amounts payable to regulatory
authorities, or customers, in certain
jurisdictions. This gives rise to a
risk over the accuracy of accruals,
provisions and disclosure of
contingent liabilities and the related
income statement effect.
There is also a risk that management
may influence these significant
estimates and judgements in order
to meet market expectations or
bonus targets.
• We obtained an understanding and evaluated the
design effectiveness of management’s controls around
regulatory and legal risks. This included considering
the management of legal and regulatory risks, the
quantification and recording of a provision or disclosure
of a contingent liability;
• Inquired of management and the Group's external legal
advisers, where appropriate, about any known instances
of material breaches in regulatory or licence compliance
and the potential consequences of any such breach
to inform our assessment of the Group’s evaluation of
provisions to be recorded or a contingent liability to be
disclosed.
• Inspected the Group’s correspondence with regulators
and tax authorities to identify any legal or regulatory
concerns, to assess the completeness of matters
evaluated by the Group and to inform the likelihood of
any actual or potential licence restrictions;
• For certain matters, we engaged EY forensic accounting
specialists to evaluate whether breaches identified were
indicative of pervasive process deficiencies and control
failings or specific to certain markets or other factors;
• In respect of the regulatory provisions, we obtained an
understanding of the fact patterns through discussions
with management and the Group’s external legal
advisors, read their written legal confirmations and
performed our own searches for contradictory evidence.
• We agreed provisions to third party support, for
example post year end settlement agreements and/
or confirmation from the Group’s external legal advisors
that they consider the quantum of the provisions for
regulatory matters to be appropriate;
• Evaluated management’s interpretation and application
of relevant laws and regulations and assessed the risks
in respect of the Group’s operations outside of regulated
markets;
• Circularised confirmations to management’s relevant
external legal experts to test the completeness of
outstanding legal or regulatory issues as at 31 December
2023;
• Tested the completeness of the Group’s legal expenses,
in coordination with the discussions with Group’s legal
advisers, to ensure the completeness of circularised
confirmations;
• Engaged EY gaming tax specialists to assist us in
auditing the risks in respect of gaming duties and fines;
• Assessed appropriateness of disclosures in note 22
and 31 of the consolidated financial statements by
comparing the disclosures against the requirements
under UK adopted international accounting standards.
The Group audit team performed all audit procedures over
the regulatory and legal risk, which covered 100% of the
balance sheet amount.
94
888 HOLDINGS PLC RISK
OUR RESPONSE TO THE RISK
Revenue recognition
The Group recognised revenue of
£1,710.9 million in 2023 (2022: £1,238.8
million).
• We obtained an understanding and evaluated the design
effectiveness of management’s controls over revenue.
In relation to the risk over systematic errors in calculations or
interfacing we performed the following procedures:
The Group’s revenue recognition
process for material revenue streams
is highly dependent on the Group’s
complex gaming systems and
gaming servers, which process a high
volume of transactions. Systematic
errors in calculations or interfacing
could result in incorrect reporting of
revenue.
There is a further risk that
management may override
operational controls in respect
of revenue recognition leading to
revenue being materially different to
cash receipts or overstated in order
to meet market expectations.
Refer to the significant accounting
policies (Note 1 on pages 105 to
114); and Note 2 to the Consolidated
Financial Statements (pages 115 and
116).
• For certain IT systems we tested the IT general control
environment where we considered the system to be
supportive of a controls reliance approach. Where
IT systems were not supportive of a controls reliance
approach, we walked through the IT processes and
designed and executed incremental substantive
procedures to address the risk;
• Performed a correlation analysis between revenue and
cash receipts to confirm that in aggregate, the revenues
recognised were equivalent to the cash receipts adjusted
for known timing differences;
• Applied IT-based auditing techniques to test manual
reconciliations between the Group’s gaming revenue and
cash;
• Performed transaction testing for each revenue stream
to test the interface between gaming servers, production
systems and cash processing system;
• Performed detailed substantive testing on a sample of
revenue transactions, including validation of bets/wins,
deposits/withdrawals and aggregated cash receipts
from payment service providers and shops;
• Performed computer assisted audit techniques to search
for other material manual adjustments to revenue and
audited the fair value of bet positions;
• Obtained and reviewed third party assurance reports,
which provided independent assurance over the
Company’s processes and controls over the development
and maintenance of games and their underlying
algorithms; and
• Searched for contradictory evidence for indicators of
gaming system error and manipulation by inspecting
whistleblower reports, reviewing correspondence with
regulators and reviewing customer complaints.
In relation to the risk over management override we
performed the following procedures:
• Used data analytic tools to identify revenue related
manual journals posted to the general ledger and traced
these back to source systems or other corroborative
evidence. We obtained and evaluated underlying source
documentation to test the completeness and accuracy
of the postings, including those journals we considered
unusual in nature.
We also assessed the appropriateness of the disclosures
in note 1 and 2 of the consolidated financial statements by
comparing the disclosures against the requirements under
UK adopted international accounting standards.
KEY OBSERVATIONS
COMMUNICATED TO THE
AUDIT AND RISK COMMITTEE
Based on the procedures
performed, including those in
respect of manual adjustments
to revenue, we did not identify
any evidence of material
misstatement in the revenue
recognised in the year ended 31
December 2023.
95
ANNUAL REPORT & ACCOUNTS 2023 STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SUPPLEMENTARY INFORMATION
INDEPENDENT AUDITOR’S REPORT CONTINUED
To the members of 888 Holdings PLC
KEY OBSERVATIONS
COMMUNICATED TO THE
AUDIT AND RISK COMMITTEE
Based on our audit
procedures, including our own
independently developed
ranges and sensitivities
applied, we are satisfied that
no impairment is required in
respect of the Retail, UK online
or international online Groups of
CGUs as at 31 December 2023.
The disclosures in the financial
statements are in accordance
with IAS 36.
Based on the level of headroom
and our own sensitivities
applied, the additional
sensitivity disclosures for key
assumptions for UK Retail are
appropriate
RISK
OUR RESPONSE TO THE RISK
Revenue recognition continued
The Group audit team performed audit procedures over
revenue, which covered 96% of the Group’s revenue. The
Malta component team has performed audit procedures
over 3% of the remaining revenue balance as part of their
full scope procedures.
Impairment of Goodwill
As at 31 December 2023 the Group
had goodwill of £763.3 million
(2022: £797.3 million) relating to the
acquisition of the William Hill Group
in 2022;
• We obtained an understanding of the process and
evaluated the design effectiveness of management’s
controls around impairment of goodwill. This included
consideration of management’s completeness and
accuracy of data and assumptions used in the
impairment assessments;
The recoverable amount and
headroom on the Group’s of CGUs
tested for impairment are disclosed
in note 12.
There is a risk that these assets (in
particular Retail) are not supported
by either the future cash flows they
are expected to generate or their
fair value less costs of disposal,
resulting in an impairment charge
that has not been recognised by
management.
Refer to the significant accounting
policies (Note 1 on pages 105 to 114);
and Note 12 to the Consolidated
Financial Statements (pages 125 to
127).
• We assessed management’s modelling for clerical
accuracy and consistency with IAS 36;
• We challenged management’s modelling assumptions
(particularly in respect of forecast growth rates)
by comparing inputs to past performance, current
trading conditions, board approved forecasts, external
benchmarks (including analyst reports), competitor
performance and searched for external information that
may be contrary to management’s assessment;
• We ensured the consistency of the impairment models
with other areas of the audit, including going concern
forecasting;
• We involved valuation specialists to assess the discount
rates used in each value in use calculation by performing
an independent calculation of a range of acceptable
discount rates and comparing this with the rates utilised
by the Group;
• We performed sensitivity analysis and reverse stress
testing, by flexing key inputs such as short and long
term growth rates and the discount rate to stress test
management’s modelling;
• We assessed the appropriateness of the disclosures in
note 1 and 12 of the consolidated financial statements
by comparing the disclosures against the requirements
under UK adopted international accounting standards.
The Group audit team performed all audit procedures over
the risk, which covered 100% of the balance sheet amount.
In the prior year, our auditor’s report included a Key Audit Matter in relation to acquisition accounting (relating to the purchase of the
William Hill Group in 2022). In the current year, as there were no material acquisitions, this Key Audit Matter has been removed.
OUR APPLICATION OF MATERIALITY
We apply the concept of materiality in planning and performing the audit, in evaluating the effect of identified misstatements on the audit
and in forming our audit opinion.
Materiality
The magnitude of an omission or misstatement that, individually or in the aggregate, could reasonably be expected to influence the
economic decisions of the users of the financial statements. Materiality provides a basis for determining the nature and extent of our audit
procedures.
We determined materiality for the Group to be £6.2 million (2022: £4.3 million), which is 2% (2022: 2%) of Adjusted EBITDA. We believe that
Adjusted EBITDA provides us with the most relevant performance measure to the stakeholders of the Group, given the prominence of this
metric throughout the Annual Report and consolidated financial statements and its alignment to investor presentations.
We determined materiality for the Parent company to be £4.8 million (2022: £5.2 million), which is 2% (2022: 2%) of Equity.
96
888 HOLDINGS PLC OUR APPLICATION OF MATERIALITY CONTINUED
Materiality continued
STARTING BASIS
• Adjusted EBITDA of £308.3 million
ADJUSTMENTS
MATERIALITY
• Share benefit credit of £0.5 million
• Foreign exchange gains of £1.0 million
• Totals £309.8 million
• Materiality of £6.2 million (2022: £4.3 million), representing 2% of Adjusted EBITDA
During the course of our audit, we reassessed initial materiality to reflect the Group’s final Adjusted EBITDA. This resulted in materiality
deceasing by £0.4m from £6.6 million to £6.2 million.
Performance materiality
The application of materiality at the individual account or balance level. It is set at an amount to reduce to an appropriately low level the
probability that the aggregate of uncorrected and undetected misstatements exceeds materiality.
On the basis of our risk assessments, together with our assessment of the Group’s overall control environment, our judgement was that
performance materiality was 50% (2022: 50%) of our planning materiality, namely £3.1 million (2022: £2.1 million). We have set performance
materiality at the same percentage as 2022 given the given our assessment of risk arising from the extent of ongoing change within the
Group, including in its operations and its management, resulting in our expectation that there is a higher likelihood of misstatements
occurring in the financial statements.
Audit work at component locations for the purpose of obtaining audit coverage over significant financial statement accounts is undertaken
based on a percentage of total performance materiality. The performance materiality set for each component is based on the relative
scale and risk of the component to the Group as a whole and our assessment of the risk of misstatement at that component. In the current
year, the range of performance materiality allocated to components was £0.4 million to £1.6 million (2022: £0.4 million to £1.4 million).
Reporting threshold
An amount below which identified misstatements are considered as being clearly trivial.
We agreed with the Audit and Risk Committee that we would report to them all uncorrected audit differences in excess of £0.3 million
(2022: £0.2 million), which is set at 5% of planning materiality, as well as differences below that threshold that, in our view, warranted
reporting on qualitative grounds.
We evaluate any uncorrected misstatements against both the quantitative measures of materiality discussed above and in light of other
relevant qualitative considerations in forming our opinion.
OTHER INFORMATION
The other information comprises the information included in the annual report set out on pages 1 to 89 including the Strategic Report, the
Directors’ Report and the Corporate Governance Report, other than the financial statements and our auditor’s report thereon. The directors
are responsible for the other information contained within the annual report.
Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in this
report, we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the
financial statements or our knowledge obtained in the course of the audit or otherwise appears to be materially misstated. If we identify
such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material
misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material
misstatement of the other information, we are required to report that fact.
We have nothing to report in this regard.
OPINION ON OTHER MATTER PRESCRIBED BY THE GIBRALTAR COMPANIES ACT 2014
In our opinion the information given in the Directors’ Report for the financial year for which the financial statements are prepared is
consistent with the financial statements and has been properly prepared in accordance with the Gibraltar Companies Act 2014 Act.
Opinions on other matters in accordance with the terms of our engagement letter with the Company.
97
ANNUAL REPORT & ACCOUNTS 2023 STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SUPPLEMENTARY INFORMATION
INDEPENDENT AUDITOR’S REPORT CONTINUED
To the members of 888 Holdings PLC
OPINION ON OTHER MATTER PRESCRIBED BY THE GIBRALTAR COMPANIES ACT 2014 CONTINUED
In our opinion, based on the work undertaken in the course of the audit:
• the part of the directors’ remuneration report to be audited has been properly prepared in accordance with the basis of preparation.
• the information given in the strategic report for the financial year for which the financial statements are prepared is consistent with
the financial statements and that report has been prepared in accordance with the basis of preparation;
MATTERS ON WHICH WE ARE REQUIRED TO REPORT BY EXCEPTION AS PRESCRIBED BY THE GIBRALTAR COMPANIES ACT 2014
In the light of our knowledge and understanding of the Group and the Parent company and its environment obtained in the course of the
audit. We have nothing to report in respect of the following matters:
• We have identified material misstatements in the Directors’ Report; and
• We have not received all the information and explanations we required for our audit.
MATTERS ON WHICH WE ARE REQUIRED TO REPORT BY EXCEPTION IN ACCORDANCE WITH THE TERMS OF OUR ENGAGEMENT
LETTER WITH THE COMPANY
In the light of our knowledge and understanding of the Group and the Parent company and its environment obtained in the course of the
audit. We have nothing to report in respect of the following matters:
• We have identified material misstatements in the strategic report;
• Adequate accounting records have not been kept by the Parent company;
• Parent company financial statements and the audited Directors’ Remuneration Report are not in agreement with the accounting
records and returns; and
• Disclosures of directors’ remuneration specified by law are not appropriately made.
CORPORATE GOVERNANCE STATEMENT
We have reviewed the directors’ statement in relation to going concern, longer-term viability and that part of the Corporate Governance
Statement relating to the Group and company’s compliance with the provisions of the UK Corporate Governance Code specified for our
review by the Listing Rules.
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate Governance
Statement is materially consistent with the financial statements or our knowledge obtained during the audit:
• Directors’ statement with regards to the appropriateness of adopting the going concern basis of accounting and any material
uncertainties identified set out on page 86;
• Directors’ explanation as to its assessment of the Company’s prospects, the period this assessment covers and why the period is
appropriate set out on page 42;
• Director’s statement on whether it has a reasonable expectation that the Group will be able to continue in operation and meets its
liabilities set out on pages 42 and 86;
• Directors’ statement on fair, balanced and understandable set out on page 89;
• Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks set out on page 87;
• The section of the annual report that describes the review of effectiveness of risk management and internal control systems set out on
page 59; and;
• The section describing the work of the Audit and Risk Committee set out on page 56 to 61.
RESPONSIBILITIES OF DIRECTORS
As explained more fully in the directors’ responsibilities statement set out on page 88, the directors are responsible for the preparation of
the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is
necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the Group and parent company’s ability to continue as
a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the
directors either intend to liquidate the Group or the Parent company or to cease operations, or have no realistic alternative but to do so.
AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL STATEMENTS
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement,
whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance,
but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of these financial statements.
98
888 HOLDINGS PLC EXPLANATION AS TO WHAT EXTENT THE AUDIT WAS CONSIDERED CAPABLE OF DETECTING IRREGULARITIES, INCLUDING FRAUD
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect irregularities, including fraud. The risk of not detecting a material misstatement due to fraud is
higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or
intentional misrepresentations, or through collusion. The extent to which our procedures are capable of detecting irregularities, including
fraud is detailed below.
However, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the
Company and management.
• We obtained an understanding of the legal and regulatory frameworks that are applicable to the Group and determined that
the most significant are those related to gambling regulations and related gaming and indirect taxes in different countries where
the Group is operating, including the UK, Spain, Gibraltar, Malta, Italy, Austria and other countries, those related to relevant tax
compliance regulations in the UK, Gibraltar, Malta, Spain and Israel and related to the financial reporting framework (UK adopted
international accounting standards, UK Corporate Governance Code, Gibraltar Companies Act 2014, the Listing Rules of the London
Stock Exchange and the Bribery Act 2010);
• We understood how 888 Holdings PLC is complying with those frameworks by making enquiries of management and the Company’s
external legal and tax advisers. We corroborated our enquiries through our review of board minutes, discussion with the Audit and Risk
Committee and any correspondence with regulatory bodies and tax authorities, and our audit procedures in respect of 'Regulatory
and legal risk' (as described above);
• We assessed the susceptibility of the Group’s financial statements to material misstatement, including how fraud might occur by
meeting with management to understand where they considered there was susceptibility to fraud, including in respect of revenue
recognition. We also considered performance targets and their influence on efforts made by management to manage earnings or
influence the perceptions of analysts. Where this risk was considered to be higher, we performed audit procedures to address each
identified fraud risk. These procedures included testing journal entries;
• Based on this understanding we designed our audit procedures to identify non-compliance with such laws and regulations, including
anti-money laundering. The Group operates in the gaming industry which is a highly regulated environment and our procedures
involved audit procedures in respect of 'Regulatory and legal risk' (as described above), as well as review of board minutes to identify
non-compliance with such laws and regulations, review of reporting to the Audit and Risk Committee on compliance with regulations
and enquiries of management and the Group’s external legal counsel and tax advisors;
• For certain matters, we engaged EY forensic accounting specialists to evaluate whether items identified were indicative of pervasive
process deficiencies and control failings or specific to certain markets or isolated factors;
• In respect of the UK, Gibraltar and Malta component teams, any instances of non-compliance with laws and regulations were
addressed with management by the Group audit team; and
• The Non-Statutory Auditor and the Statutory Auditor assessed and was satisfied that the engagement team collectively had the
appropriate competence and capabilities to identify or recognise non-compliance with laws and regulations in the gaming industry,
and details of those matters about non-compliance with laws and regulations and fraud that were communicated to the engagement
team;
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website
at https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
OTHER MATTERS WE ARE REQUIRED TO ADDRESS
• We were appointed by the Company on 30 June 2014 to audit the financial statements for the year ending 31 December 2014 and
subsequent financial periods. The period of total uninterrupted engagement including previous renewals and reappointments is 10
years, covering the years ended 31 December 2014 to 31 December 2023.
• Our audit engagement letter was refreshed on 12 April 2023. The non-audit services prohibited by the FRC’s Ethical Standard were not
provided to the Group or the Parent company and we remain independent of the Group and the Parent company in conducting the
audit.
• The audit opinion is consistent with the additional report to the Audit and Risk Committee.
USE OF OUR REPORT
This report, including the opinion, has been prepared for and only for the Company’s members as a body in accordance with Section 257
of the Gibraltar Companies Act 2014 and our engagement letter dated 12 April 2023 and for no other purpose. We do not, in giving these
opinions, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it
may come save where expressly agreed by our prior consent in writing.
MARCUS BUTLER (NON-STATUTORY AUDITOR)
DALE CRUZ (STATUTORY AUDITOR)
For and on behalf of Ernst
& Young LLP, London
26 March 2024
For and on behalf of EY Limited, Registered
Auditors, Gibraltar
26 March 2024
99
ANNUAL REPORT & ACCOUNTS 2023 STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SUPPLEMENTARY INFORMATION
CONSOLIDATED INCOME STATEMENT
For the year ended 31 December 2023
Revenue
Gaming duties
Other cost of sales
Exceptional items — cost of sales
Cost of sales
Gross profit
Marketing expenses
Operating expenses
Share of post-tax profit of equity accounted associate
Exceptional items — operating expenses
Operating profit/(loss)
Adjusted EBITDA1
Exceptional items — cost of sales and operating expenses
Fair value gain on financial assets
Foreign exchange gains/(losses)
Share benefit credit/(charge)
Depreciation and amortisation
Operating profit/(loss)
Finance income
Finance expenses
Loss before tax
Taxation credit/(charge)
Loss after tax
Equity holders of the Parent
Non-controlling interests
Loss per share
Basic (pence)
Diluted (pence)
Note
2
3
4,14
3
5
3
25
28
12,13
5
7
8
9
10
10
2023
£m
1,710.9
(372.0)
(198.0)
—
(570.0)
1,140.9
(237.6)
(819.1)
1.4
(52.6)
33.0
308.3
(52.6)
4.1
1.0
0.5
(228.3)
33.0
41.0
(195.3)
(121.3)
64.9
(56.4)
(56.4)
—
(56.4)
(12.6)
(12.6)
2022
£m
1,238.8
(256.3)
(188.1)
3.9
(440.5)
798.3
(257.8)
(448.5)
0.3
(97.1)
(4.8)
217.9
(93.2)
—
(4.0)
(5.2)
(120.3)
(4.8)
0.8
(111.7)
(115.7)
(4.9)
(120.6)
(120.5)
(0.1)
(120.6)
(28.3)
(28.3)
1. Adjusted EBITDA is an Alternative Performance Measure ('APM') which does not have an IFRS standardised meaning. Refer to Appendix 1 — Alternative
performance measures for further detail.
100
888 HOLDINGS PLC CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 December 2023
Loss for the year
Items that may be reclassified subsequently to profit or loss (net of tax)
Exchange differences on translation of foreign operations
Movement in cash flow hedging position
Items that will not be reclassified to profit or loss (net of tax)
Remeasurement of severance pay liability
Actuarial remeasurement in defined benefit pension scheme
Tax on severance pay liability
Movement in hedging reserve
Movement in equity investment designated at fair value through OCI
Total other comprehensive loss for the year
Total comprehensive loss for the year
Total comprehensive loss for the year attributable to equity holders of the Parent
Total comprehensive loss for the year attributable to non-controlling interests
The notes on pages 105 to 154 form part of these consolidated financial statements.
Note
15
2023
£m
(56.4)
(22.8)
(1.2)
(0.2)
1.8
—
—
—
(22.4)
(78.8)
(78.8)
—
2022
£m
(120.6)
2.5
(14.4)
1.7
(0.8)
0.6
1.0
(1.0)
(10.4)
(131.0)
(130.9)
(0.1)
101
ANNUAL REPORT & ACCOUNTS 2023 STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SUPPLEMENTARY INFORMATION
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
At 31 December 2023
Assets
Non-current assets
Goodwill and other intangible assets
Right-of-use assets
Property, plant and equipment
Investment in sublease
Investments in associates
Non-current prepayments
Derivative financial instruments
Deferred tax assets
Current assets
Cash and cash equivalents1
Trade and other receivables
Income tax receivable
Derivative financial instruments
Assets held for sale
Total assets
Equity and liabilities
Share capital
Share premium
Treasury shares
Foreign currency translation reserve
Hedging reserves
Retained earnings
Total equity
Liabilities
Non-current liabilities
Borrowings
Severance pay liability
Retirement benefit liability
Provisions
Deferred tax liability
Derivative financial instruments
Lease liabilities
Current liabilities
Borrowings
Trade and other payables
Provisions
Derivative financial instruments
Income tax payable
Lease liabilities
Customer deposits
Total equity and liabilities
Note
12
13
13
14,15
19
25
26
20
19
25
17
27
27
23
6
29
22
26
25
18
23
21
22
25
9
18
21
2023
£m
20222
£m
2,038.3
78.0
91.7
1.0
33.9
2.8
15.8
37.0
2,298.5
256.2
138.0
53.3
1.6
—
449.1
2,747.6
2.2
160.7
(0.6)
1.8
(14.6)
(69.6)
79.9
1,657.2
0.6
—
104.8
156.9
29.9
64.2
2,013.6
3.9
374.7
78.5
23.5
22.3
23.4
127.8
654.1
2,208.3
81.9
110.4
1.4
38.4
6.2
16.6
5.2
2,468.4
317.6
132.7
35.2
2.0
6.9
494.4
2,962.8
2.2
160.7
(0.9)
24.6
(13.4)
(14.0)
159.2
1,697.5
1.2
1.2
101.9
216.0
17.4
65.0
2,100.2
4.8
368.0
111.5
20.8
33.0
24.0
141.3
703.4
2,747.6
2,962.8
1. Cash and cash equivalents includes customer deposits of £127.8m (2022: £141.3m)
which represent bank deposits matched by customer liabilities of an equal value. Cash
and cash equivalents excludes restricted short-term deposits of £22.6m which are
presented in Trade and other receivables (2022: £21.6m).
The consolidated financial statements on pages 100 to 104 were
approved and authorised for issue by the Board of Directors on 26
March 2024 and were signed on its behalf by:
2. Since the disclosure of the provisional fair values for the acquisition of William Hill
on 1 July 2022, an adjustment of £15.7m has been made to increase the fair value of
provisions, with a related £4.4m reduction in deferred tax liabilities, and an equivalent
movement in goodwill. This adjustment has been made after the 31 December 2022
year end accounts and during the measurement period. See note 16 and 22 for further
details.
PER WIDERSTRÖM
SEAN WILKINS
Chief Executive Officer Chief Financial Officer
The notes on pages 105 to 154 form part of these consolidated
financial statements.
102
888 HOLDINGS PLC CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2023
Share
capital
£m
Share
premium
£m
Treasury
shares
£m
Foreign
currency
translation
reserve
£m
Hedging
reserve
£m
Retained
earnings
£m
Non-
controlling
interests
£m
Balance at 1 January 2022
Loss after tax for the year
Other comprehensive income/(expense)
for the year
Total comprehensive income/(expense)
Issue of shares (equity placing)
Equity settled share benefit
charges (note 28)
Acquisition of treasury shares
Exercise of Deferred Share Bonus Plan
Balance at 31 December 2022
Loss after tax for the year
Other comprehensive
(expense)/income for the year
Total comprehensive expense
Equity settled share benefit credit (note 28)
Exercise of Deferred Share Bonus Plan
1.9
—
—
—
0.3
—
—
—
2.2
—
—
—
—
—
2.5
—
—
—
158.2
—
—
—
160.7
—
—
—
—
—
(0.9)
—
—
—
—
—
(0.7)
0.7
(0.9)
—
—
—
—
0.3
22.1
—
2.5
2.5
—
—
—
—
24.6
—
(22.8)
(22.8)
—
—
—
—
(13.4)
(13.4)
—
—
—
—
(13.4)
—
(1.2)
(1.2)
—
—
Balance at 31 December 2023
2.2
160.7
(0.6)
1.8
(14.6)
The following describes the nature and purpose of each reserve within equity.
Share capital — represents the nominal value of shares allotted, called-up and fully paid.
Share premium — represents the amount subscribed for share capital in excess of nominal value.
98.8
(120.5)
0.5
(120.0)
—
7.9
—
(0.7)
(14.0)
(56.4)
1.6
(54.8)
(0.5)
(0.3)
(69.6)
0.1
(0.1)
—
(0.1)
—
—
—
—
—
—
—
—
—
—
—
Total
£m
124.5
(120.6)
(10.4)
(131.0)
158.5
7.9
(0.7)
—
159.2
(56.4)
(22.4)
(78.8)
(0.5)
—
79.9
Treasury shares — represents reacquired own equity instruments. Treasury shares are recognised at cost and deducted from equity.
Foreign currency translation reserve — represents exchange differences arising from the translation of all Group entities that have
functional currency different from £.
Hedging reserve — represents changes in the fair value of derivative financial instruments designed in a hedging relationship.
Retained earnings — represents the cumulative net gains and losses recognised in the Consolidated Statement of Comprehensive Income
and other transactions with equity holders.
The notes on pages 105 to 154 form part of these consolidated financial statements.
103
ANNUAL REPORT & ACCOUNTS 2023 STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SUPPLEMENTARY INFORMATION
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 31 December 2023
Cash flows from operating activities
Loss before income tax
Adjustments for:
Depreciation of property, plant and equipment and right-of-use assets
Amortisation
Interest income
Interest expenses
Income tax paid
Fair value gain on financial assets
Share of post-tax loss of equity accounted associate
Non-cash exceptional items
Profit on sale of businesses
Movement on ante post and other financial derivatives
Profit on sale of freehold properties via sale and leaseback
Gain on disposal of property, plant and equipment
Share benefit (credit)/charge
Cash generated from operating activities before working capital movement
Increase in receivables
Decrease in customer deposits
Decrease in trade and other payables
Decrease in provisions
Net cash generated from/(used in) operating activities
Cash flows from investing activities
Acquisition of intangible assets
Acquisition of property, plant and equipment
Proceeds from sale of businesses
Proceeds on sale and leaseback of freehold properties
Proceeds from sale of property, plant and equipment
Loans to related parties
Interest received
Dividend received from associate
Acquisition of William Hill (net of cash acquired)
Net cash used in investing activities
Cash flows from financing activities
Payment of lease liabilities
Settlement of derivatives
Interest paid
Repayment of loans
Issue of shares — equity placing
Proceeds from loans
Loan transaction fees
Acquisition of treasury shares
Net cash (used in)/generated from financing activities
Net (decrease)/Increase in cash and cash equivalents
Net foreign exchange difference
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
The notes on pages 105 to 154 form part of these consolidated financial statements.
104
Note
2023
£m
2022
£m
(121.3)
(115.7)
13
12
7
8
16
28
13
16
7
14
16
18
25
23
27
23
20
20
46.3
182.0
(41.0)
195.3
(30.1)
(4.1)
(1.4)
5.9
0.3
7.6
(4.6)
(1.1)
(0.5)
233.3
(1.9)
(13.4)
(39.6)
(27.0)
151.4
(62.9)
(7.4)
19.2
22.6
1.9
(4.3)
3.9
5.9
—
(21.1)
(31.8)
(10.8)
(142.0)
(4.0)
—
—
—
—
(188.6)
(58.3)
(3.1)
317.6
256.2
30.8
89.5
(0.8)
111.7
(35.1)
—
(0.3)
52.3
—
2.3
—
(0.3)
5.2
139.6
(50.3)
(9.2)
(100.3)
(10.0)
(30.2)
(67.9)
(8.9)
32.5
—
0.5
—
0.8
0.9
(386.8)
(428.9)
(21.5)
—
(75.6)
(1,503.2)
158.5
2,163.1
(132.3)
(0.7)
588.3
129.2
(1.0)
189.4
317.6
888 HOLDINGS PLC NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 December 2023
GENERAL INFORMATION
Company description
888 Holdings Plc (the 'Company') and its subsidiaries (together the 'Group') was founded in 1997 in the British Virgin Islands and since
17 December 2003 has been domiciled in Gibraltar (Company number 90099). On 4 October 2005, the Company listed on the London
Stock Exchange.
Definitions
In these financial statements:
The Company
The Group
Subsidiaries
Related parties
Associates
1 ACCOUNTING POLICIES
888 Holdings PLC.
888 Holdings PLC and its subsidiaries.
Companies over which the Company has control (as defined in IFRS 10 — Consolidated Financial
Statements) and whose accounts are consolidated with those of the Company.
As defined in IAS 24 ‘Related Party Disclosures’.
As defined in IAS 28 ‘Investments in Associates and Joint Ventures’.
The material accounting policies applied in the preparation of the consolidated financial statements are as follows:
Basis of preparation
The consolidated financial statements of the Group have been prepared in accordance with UK adopted international accounting
standards and in accordance with the requirements of the Gibraltar Companies Act 2014. The consolidated financial statements have been
prepared on a historical cost basis, except where certain assets or liabilities are held at amortised cost or at fair value as described in the
Group’s accounting policies.
All values are rounded to the closest hundred thousand, except when otherwise indicated.
The significant accounting policies applied in the consolidated financial statements in the prior year have been applied consistently in
these consolidated financial statements, except for the amendments to accounting standards effective for the annual periods beginning
on 1 January 2023. These are described in more detail below.
As a Company incorporated in Gibraltar, 888 Holdings Plc is not required by UK law or regulation to prepare the Directors’ Remuneration or
Strategic reports under regulation that applies to UK incorporated companies. However, by virtue of 888’s Premium Listing on the London
Stock Exchange and reflecting the Directors' approach to good governance and investor expectation, we have prepared these reports in
line with the requirements under the UK Companies Act 2006.
The Directors’ Remuneration Report, set out on pages 66 to 82, has been voluntarily prepared in accordance with sections 420 to 422
UK Companies Act 2006.
The information given in the Strategic Report, set out on pages 2 to 43, has been voluntarily prepared in accordance with section 414
UK Companies Act 2006.
Going concern
Background
The financial statements have been prepared using the going concern basis of accounting. As at the year end, the Group had net assets
of £79.9m (2022: £159.2m) and incurred a statutory loss before tax of £121.3m during the year (2022: £115.7m loss). The Group also had net
current liabilities of £205.0m (2022: £209.0m).
A full description of the Group’s business activities, financial position, cash flows, liquidity position, committed facilities and borrowing
position, together with the factors likely to affect its future development and performance, is set out in the Strategic Report on pages
2 to 43, and in notes 23 to 25 to these financial statements.
Business planning and performance management
The Group has robust forecasting and monitoring processes which consist of weekly monitoring and careful management of liquidity, an
annual budget and a long-term plan, which generates income statement and cash flow projections for assessment by management and
the Board. Forecasts are regularly compared with prior forecasts and current trading to identify variances and understand their future
impact so management can act where appropriate. Analysis is undertaken to review and sense check the key assumptions, including the
integration and transformation programmes, underpinning the forecasts.
Whilst there are risks to the Group’s trading performance (as summarised in the Risks section of the Strategic Report on pages 30 to
41), the Group has established risk management processes to identify and mitigate risks, and such risks have been considered when
undertaking the going concern evaluation for the period to 30 June 2025.
105
ANNUAL REPORT & ACCOUNTS 2023 STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SUPPLEMENTARY INFORMATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
For the year ended 31 December 2023
1 ACCOUNTING POLICIES CONTINUED
Going concern continued
The Group’s future prospects
As highlighted in note 24 to the financial statements, the Group meets its day-to-day working capital requirements from the positive cash
flows generated by its trading activities and its available cash resources. The Group holds cash and cash equivalents excluding customer
balances and restricted cash of £128.4m as at 31 December 2023 (2022: £176.3m). In addition to this the Group has access, until 31
December 2027, to a £150m Revolving Credit Facility, which was undrawn as of 31 December 2023.
The Group entered into significant debt arrangements in the previous year to fund the acquisition of the William Hill business (also
described in note 24). Other than an annual $5.0m repayment on the TLB facility, no borrowings are due within the period of the going
concern evaluation or in the period soon after it. The next due date on the Group’s debt is in 2026 and the majority is repayable in 2027-28.
The Group’s Revolving Credit Facility contains a net leverage covenant which is not restrictive in the base case, downside or reverse stress
test scenarios. The remainder of the Group’s debt does not contain any financial covenants.
The Group’s forecasts, for the going concern evaluation period to 30 June 2025, based on reasonable assumptions including, in the base
case, a 10% increase in 2024 revenue coupled with higher marketing investment, indicate that the Group will be able to operate within the
level of its currently available and expected future facilities for this period to 30 June 2025. Under the base case forecast, the Group has
sufficient cash reserves and available facilities to enable it to meet its obligations as they fall due, for this going concern evaluation period
to 30 June 2025.
The Group has also assessed a range of downside scenarios to evaluate whether any material uncertainty exists relating to the Group’s
ability to continue as a going concern. The forecasts and scenarios consider severe but plausible downsides that could impact the Group,
which are linked to the business risks identified by the Group. These scenarios, both individually and in combination, have enabled the
Directors to conclude that the Group has adequate resources to continue to operate for the foreseeable future.
Specifically, the Directors have given careful consideration to the regulatory and legal environment in which the Group operates. Downside
sensitivities have been run, individually and in aggregate, to assess the impact of the following scenarios:
• Reductions in revenue reflecting a lower return on marketing investment than budgeted;
• Reductions in profitability for the Group of 10% to reflect potential regulatory, macroeconomic and competitive pressures;
• An increase in interest expense as a result of higher interest rates on the Group’s remaining floating rate debt;
• The phasing of cash outflows relating to regulatory and other provisions and accrual settlements; and
• A 10% increase in the Group’s capex spend as a result of execution delays or product overspends.
Management has performed a separate reverse stress test to identify the conditions that would be required to compromise the Group’s
liquidity. Having done so, management has identified further actions to conserve or generate cash to mitigate any impact of such a
scenario occurring. Management has calculated mitigating cost savings that can be implemented by reducing variable operating
expenditure to offset a reduction in cash generation resulting from lower profitability. Following these actions, the Group could withstand
a decrease in forecast adjusted EBITDA of 38%. The Board considers the likelihood of a decline of this magnitude to be remote. Other
initiatives, not directly in the Group’s control at the date of approval of these financial statements, could be considered including the
disposal of non-core assets and investments.
Should a more extreme downside scenario occur, or mitigations and initiatives not be achieved, further mitigating actions that can be
executed in the necessary timeframe could be taken, such as a temporary reduction of marketing expenditures.
Conclusion
Based on the above considerations, the Directors continue to adopt the going concern basis in preparing these financial statements.
New standards, interpretations and amendments adopted by the Group
In preparing the Group financial statements for the current period, the Group has adopted the following new IFRSs, amendments to IFRSs
and IFRS Interpretations Committee (IFRIC) interpretations. All standards do not have a significant impact on the results or net assets of the
Group. Changes are detailed below:
IFRS 17
IAS 1 (amended)
IAS 8 (amended)
IAS 12 (amended)
IAS 12 (amended)
Insurance Contracts (effective 1 January 2023)
Disclosure of Accounting Policies (effective 1 January 2023)
Definition of Accounting Estimates (effective 1 January 2023)
Deferred Tax related to Assets and Liabilities arising from a Single Transaction (effective 1 January 2023)
International Tax Reform — Pillar Two Model Rules (effective 1 January 2023)
Standards in issue but not effective
At the date of authorisation of the Group financial statements, the following amendments and Interpretations, which have not been applied
in these Group financial statements, were in issue but not yet effective:
106
888 HOLDINGS PLC 1 ACCOUNTING POLICIES CONTINUED
New standards, interpretations and amendments adopted by the Group continued
Amendments and interpretations
IAS 1 (amended)
IAS 7 and IFRS 17 (amended)
IAS 21 (amended)
IFRS 16 (amended)
Classification of Liabilities as Current or Non-current (effective 1 January 2024)
Supplier Finance Arrangements (effective 1 January 2024)
Lack of Exchangeability (effective 1 January 2024)
Lease Liabilities in a Sale and Leaseback (effective 1 January 2024)
The Group does not currently consider that the adoption of these new standards or amendments would have a material effect on the
results or financial position of the Group.
Impact of climate change
The business continues to consider the impact of climate change in the consolidated and Company financial statements and recognise
that the most impactful risks are around the cancellation of sporting events due to extreme weather and the longer-term cost of energy.
Further, the Group has assessed the impact of climate change in the work on going concern, viability statement and impairment reviews
and considers that the above risks have been factored into these future forecasts. The Group constantly monitors the latest government
legislation in relation to climate-related matters. At the current time, no legislation has been passed that will impact the Group. The Group
will adjust key assumptions in value in use calculations and sensitise these calculations if a change is required.
Critical accounting judgements and key sources of estimation uncertainty
In the application of the Group’s accounting policies, which are described below, the Directors are required to make judgements, estimates
and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and
associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ
from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the
period in which the estimate is revised where it affects only that period or in the period and future periods if it affects both current and
future periods.
Critical accounting judgements
Internally generated intangible assets
Costs relating to internally generated intangible assets are capitalised if the criteria for recognition as assets are met. The initial
capitalisation of costs is based on management’s judgement that technological and economic feasibility criteria are met. In making
this judgement, management considers the progress made in each development project and its latest forecasts for each project. Other
expenditure is charged to the Consolidated Income Statement in the year in which the expenditure is incurred. Following initial recognition,
intangible assets are carried at cost less any accumulated amortisation and any accumulated impairment losses. For further information
see note 12.
Leases
Management considers the key judgement to be the assessment of the lease term at the point where the lessee can be reasonably certain
of its right to use the underlying asset.
Given the number of shop closures in the Retail estate historically, management determined the lease term under IFRS 16 across the Retail
estate as the next available break date, as the Group is not ‘reasonably certain’ that any lease break will not be exercised. The Group has
recognised a lease liability of £87.6m at 31 December 2023 (31 December 2022: £89.0m).
Exceptional and adjusted items
The Group classifies and presents certain items of income and expense as exceptional items. The Group presents adjusted performance
measures which differ from statutory measures due to exclusion of exceptional items and certain non-cash items as the Group considers
that it allows a further understanding of the underlying financial performance of the Group. These measures are described as 'adjusted'
and are used by management to measure and monitor the Group’s underlying financial performance. Non-cash items that are excluded
from adjusted performance measures of underlying financial performance include amortisation of acquired intangibles, amortisation of
finance fees, share benefit charges and foreign exchange differences. Refer to Appendix 1 for further detail.
The Group considers any items of income and expense for classification as exceptional if they are one off in nature and by virtue of their
size. The items classified as exceptional (and are excluded from the adjusted measures) are described in further detail in note 3.
Significant accounting estimates
The following are the Group’s major sources of estimation uncertainty that have a significant risk of resulting in a material adjustment to the
carrying amounts of assets and liabilities within the next financial year.
107
ANNUAL REPORT & ACCOUNTS 2023 STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SUPPLEMENTARY INFORMATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
For the year ended 31 December 2023
1 ACCOUNTING POLICIES CONTINUED
Critical accounting judgements continued
Impairment of goodwill
For the purposes of impairment testing under IAS 36 Impairment of Assets, CGUs are grouped to reflect the level at which goodwill is
monitored by management. The key judgement is the level at which the impairment tests are performed. Management has allocated
goodwill to Retail on a group of CGUs basis, International on a group of CGUs basis and UK&I Online as its own CGU as this is the lowest
level at which it is practical to monitor goodwill. These are the levels at which goodwill is assessed for impairment. Determining whether
goodwill is impaired requires an estimation of the value in use of the cash-generating units to which the goodwill has been allocated. The
value in use calculation requires the Group to estimate the future cash flows expected to arise from the cash-generating unit and a suitable
discount rate in order to calculate present value. Cash flows are forecast for periods up to five years. The key assumptions used in the
model are based on historical experience and other factors that are considered to be relevant, including growth rates and discount rates.
For further information see note 12.
Provisions, contingent liabilities and regulatory matters
The Group makes a number of estimates in respect of the accounting for, and disclosure of, expenses and contingent liabilities for
customer claims. Provisions are described in further detail in note 22 and contingent liabilities in note 31.
In common with other businesses in the gambling sector the Group receives claims from customers relating to the provision of gambling
services. Claims have been received from customers in a number of (principally European) jurisdictions and allege either failure to follow
responsible gambling procedures, breach of licence conditions or that underlying contracts in question are null and void given local
licensing regimes.
The Group has recognised a provision and contingent liability for customer claims in Austria and Germany where the business has been
subject to a particular acceleration of claims since 2020 following marketing campaigns by litigation funders in those jurisdictions.
Customers who have obtained judgement against the Group’s entities in the Austrian and German courts have sought to enforce those
judgements in Malta and Gibraltar. These are being defended on the basis of a public policy argument. The provisions held for the Group
relating to these claims is £113.0m (2022: £112.3m), mostly related to the Mr Green brand.
The value of the provision and contingent liability are both estimates based on the number and individual size of claims received to date
and assumptions based on such observations as can be derived from those claims and include an estimate of claims the Group assesses
it probable, for the provision, and possible, for the contingent liability, that it will receive in the future. If these rates of receipt of claims were
to increase by 25% compared to the Group’s expectation, the value across the provision recognised and contingent liability disclosed
would increase by £7.0m before consideration of potential gaming tax reclaim.
Identification and valuation of William Hill intangible assets
In the prior year, the Group acquired the International (non-US) business of William Hill on 1 July 2022 for an enterprise value of £1.73 billion.
Since the disclosure of the provisional fair values in the prior year end accounts and during the measurement period, an adjustment of
£15.7m has been made to increase the fair value of provisions in relation to the customer claims in Germany, and an equivalent increase in
goodwill has been recognised. See note 16 for further details of the change.
As part of the purchase price allocation the Group recognised separately identifiable acquired intangible assets comprising brands
(£574.4m), customer relationships (£595.1m) and gambling licences (£8.5m). Goodwill of £776.6m was recognised on acquisition. The
estimate of the value of each class of asset described above is based on recognised valuation methodologies such as the 'relief from
royalty' method for brands, recognised industry comparative data and the Group’s industry experience and specialist knowledge and
is therefore a significant accounting estimate. A 5% increase/decrease in estimated customer churn rates would (decrease)/increase
the fair value of customer relationships by (£123.0m)/£176.0m respectively. Note that consideration of provisions and contingent liabilities
identification and valuation on acquisition are considered in the provision, contingent liabilities and regulatory matters section above. This
was an area where the Group made significant accounting estimates.
Further, the Group exercised judgement in determining the intangible assets acquired and their fair value on the William Hill business
combination, with the support of external experts to support the valuation process, where appropriate. See note 16 for additional
information. These estimates and judgements only relate to the prior year.
108
888 HOLDINGS PLC 1 ACCOUNTING POLICIES CONTINUED
Basis of consolidation
The consolidated financial statements include the accounts of the Company and its subsidiaries. The subsidiaries are companies
controlled by 888 Holdings PLC. Control exists where the Company has power over an entity; exposure, or rights, to variable returns from its
involvement with an entity; and the ability to use its power over an entity to affect the amount of its returns. Subsidiaries are consolidated
from the date the Parent gained control until such time as control ceases.
The financial statements of subsidiaries are included in the consolidated financial statements using the purchase method of accounting. On
the date of the acquisition, the assets and liabilities of a subsidiary are measured at their fair values and any excess of the fair value of the
consideration over the fair values of the identifiable net assets acquired is recognised as goodwill.
Intercompany transactions and balances are eliminated on consolidation.
The financial statements of subsidiaries are prepared for the same reporting period as the Parent Company, using consistent accounting
policies.
Revenue
Revenue is measured at the fair value of the consideration received or receivable from customers and represents amounts receivable for
goods and services that the Group is in business to provide, net of discounts, marketing inducements and VAT, as set out below.
In the case of licensed betting offices (LBO) (including gaming machines), online sportsbook and telebetting and online casino (including
games on the Online arcade and other numbers bets) revenue represents gains and losses from gambling activity in the period. This
revenue is treated as a derivative under IFRS 9 ‘Financial Instruments’ and is therefore out of scope of IFRS 15 ‘Revenue from Contracts with
Customers’. Open positions are carried at fair value, and gains and losses arising on this valuation are recognised in revenue, as well as
gains and losses realised on positions that have closed.
Revenue from the Online poker business is within the scope of IFRS 15 ‘Revenue from Contracts with Customers’ and reflects the net income
(rake) earned when a poker game is completed, which is when the performance obligation is deemed to be satisfied.
Revenue from Business to Business (B2B) is mainly comprised of services provided to business partners. B2B also includes fees from the
provision of certain gaming-related services to partners. Customer advances received are treated as deferred income within current
liabilities and released as they are earned.
For services provided to business partners through its B2B unit, the Group examines whether the nature of its promise is a performance
obligation to provide the defined goods or services itself, which means the Group is a principal and therefore recognises revenue as the
gross amount of the revenue generated from use of the Group’s platform in online gaming activities with the partners’ share of the revenue
charged to marketing expenses; or to arrange that another party provide the goods or services which means the Group is an agent and
therefore recognises revenue as the amount of the net commission from use of the Group’s platform.
The Group is a principal when it controls the promised goods or services before their transfer to the customer. Indicators that the Group
controls the goods or services before their transfer to the customer include, inter alia, as follows: The Group is the primary obligor for
fulfilling the promises in the contract; the Group has inventory risk before the goods or services are transferred to the customer; and the
Group has discretion in setting the prices of the goods or services.
Cost of sales
Cost of sales consists primarily of gaming duties, payment service providers’ commissions, chargebacks, commission and royalties payable
to third parties, all of which are recognised on an accruals basis.
Operating expenses
Operating expenses consist primarily of marketing, staff costs and corporate professional expenses, all of which are recognised on an
accruals basis.
Retirement benefit costs
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
For defined benefit retirement schemes, the cost of providing benefits is determined using the Projected Unit Credit Method, with actuarial
valuations being carried out at each period end date. Actuarial remeasurements are recognised in full in the period in which they occur.
They are recognised outside profit or loss and presented in the Consolidated Statement of Comprehensive Income.
The net retirement benefit asset or obligation recognised in the Consolidated Statement of Financial Position represents the present
value of the defined benefit obligation as reduced by the fair value of scheme assets. Any net asset resulting from this calculation is not
recognised on the balance sheet as this is expected to be used to meet the costs of eventual wind-up of the plan rather than refunded to
the Company in practice.
109
ANNUAL REPORT & ACCOUNTS 2023 STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SUPPLEMENTARY INFORMATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
For the year ended 31 December 2023
1 ACCOUNTING POLICIES CONTINUED
Foreign currency
Monetary assets and liabilities denominated in currencies other than the functional currency of the relevant Company are translated into
that functional currency using year-end spot foreign exchange rates. Non-monetary assets and liabilities are translated using exchange
rates prevailing at the dates of the transactions. Exchange rate differences on foreign currency transactions are included in financial
income or financial expenses in the Consolidated Income Statement, as appropriate.
The results and financial position of all Group entities that have a functional currency different from pound sterling are translated into the
presentation currency at foreign exchange rates as set out below. Exchange differences arising, if any, are recorded in the Consolidated
Statement of Comprehensive Income as a component of other comprehensive income.
(i) assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet; and
(ii) income and expenses for each income statement are translated at an average exchange rate (unless this average is not a reasonable
approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are
translated at the dates of the transactions).
Finance income
Finance income relates to interest income and is accrued on a time basis, by reference to the principal outstanding and the effective
interest rate applicable.
Finance costs
Finance costs arising on interest-bearing financial instruments carried at amortised cost are recognised in the Consolidated Income
Statement using the effective interest rate method. Finance costs include the amortisation of fees that are an integral part of the effective
finance cost of a financial instrument, including issue costs, and the amortisation of any other differences between the amount initially
recognised and the redemption price.
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the period. Taxable profit differs from net profit as reported in the Consolidated
Income Statement because it excludes items of income or expense that are taxable or deductible in other periods, and it further excludes
items that are never taxable or deductible. The Group’s liability for current tax is calculated using tax rates that have been enacted or
substantively enacted by the period end date.
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the
financial statements and the corresponding tax bases used in the computation of taxable profit and is accounted for using the liability
method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to
the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such
assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition (other than in a
business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and associates, except where
the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the
foreseeable future.
The carrying amount of deferred tax assets is reviewed at each period end date and reduced to the extent that it is no longer probable
that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates
that are expected to apply in the period when the liability is settled or the asset is realised based on tax laws and rates that have been
enacted at the period end date. Deferred tax is charged or credited in the Consolidated Income Statement, except when it relates to items
charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.
The Group has applied the exception to recognising and disclosing information about deferred tax assets and liabilities arising from the
implementation of the global minimum tax rules published by the Organization for Economic Cooperation and Development (OECD), so-
called Pillar Two income taxes, as required under IAS 12.
Goodwill
Goodwill represents the excess of the fair value of the consideration in a business combination over the Group’s interest in the fair value
of the identifiable assets, liabilities and contingent liabilities acquired. Consideration comprises the fair value of any assets transferred,
liabilities assumed and equity instruments issued.
Goodwill is capitalised as an intangible asset with any impairment in carrying value being charged to the Consolidated Income Statement
and not subsequently reversed. Where the fair values of identifiable assets, liabilities and contingent liabilities exceed the fair value of
consideration paid, the excess is credited in full to the Consolidated Income Statement on the acquisition. Changes in the fair value of the
contingent consideration and direct costs of acquisition are charged or credited immediately to the Consolidated Income Statement.
110
888 HOLDINGS PLC 1 ACCOUNTING POLICIES CONTINUED
Intangible assets
Acquired intangible assets
Intangible assets arising on acquisitions are recorded at their fair value.
Amortisation is provided at rates calculated to write off the valuation, less estimated residual value, of each asset on a straight-line basis
over its expected useful life, as follows:
Acquired brands
Customer relationships
Bookmaking and mobile technology
Licences
assessed separately for each asset, with lives ranging up to 30 years
between 18 months and 13 years
between three and five years
10 to 20 years
Amortisation of assets arising on acquisition is recognised as an adjusted item, please see note 3 for further information.
Internally generated intangible assets
An internally generated intangible asset arising from the Group’s development of computer systems is recognised only if all of the following
conditions are met:
• an asset is created that can be identified (such as software and new processes);
• it is probable that the asset created will generate future economic benefits; and
• the development cost of the asset can be measured reliably.
Expenditure incurred on development activities of gaming platforms is capitalised only when the expenditure will lead to new or
substantially improved products or processes, the products or processes are technically and commercially feasible and the Group has
sufficient resources to complete development. All other development expenditure is expensed. Subsequent expenditure on intangible assets
is capitalised only where it clearly increases the economic benefits to be derived from the asset to which it relates. The Group estimates the
useful life of these assets as between three and five years.
Property, plant and equipment
Property, plant and equipment is stated at historical cost less accumulated depreciation. Assets are assessed at each balance sheet date
for indicators of impairment.
Depreciation is calculated using the straight-line method, at annual rates estimated to write off the cost of the assets less their estimated
residual values over their expected useful lives. The annual depreciation rates are as follows:
Freehold buildings
Long leasehold properties
Short leasehold properties
Short leasehold improvements
Fixtures, fittings and equipment and motor vehicles
Right-of-use asset
50 years
50 years
over the unexpired period of the lease
the shorter of ten years or the unexpired period of the lease
at variable rates between three and ten years
reasonably certain lease term
Impairment of non-financial assets
An intangible asset with an indefinite useful life is tested for impairment annually and whenever there is an indication that the asset may be
impaired. At each period end date, the Group reviews the carrying amounts of its goodwill, property, plant and equipment and intangible
assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the
recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where the asset does not
generate cash flows that are independent from other assets, the Group estimates the recoverable amount of the cash-generating unit to
which the asset belongs.
The recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future pre-tax
cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of
money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted. This process is described in
more detail in note 12 to the financial statements.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of
the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised as an expense immediately.
Other than for goodwill, where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit)
is increased to the revised estimate of its recoverable amount, but only to the point that the increased carrying amount does not exceed
the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit)
in prior periods. A reversal of an impairment loss is recognised as income immediately.
111
ANNUAL REPORT & ACCOUNTS 2023 STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SUPPLEMENTARY INFORMATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
For the year ended 31 December 2023
1 ACCOUNTING POLICIES CONTINUED
Fair value measurement
The Group measures certain financial instruments at fair value at each balance sheet date. The fair value related disclosures are included
in notes 24 and 25. Fair value is the price that would be received or paid in an orderly transaction between market participants at a
particular date, either in the principal market for the asset or liability or, in the absence of a principal market, in the most advantageous
market for that asset or liability accessible to the Group.
The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data is available to measure fair
value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
IFRS 13 ‘Fair Value Measurement’ emphasises that fair value is a market-based measurement, not an entity-specific measurement.
Therefore, fair value measurements under IFRS 13 should be determined based on the assumptions that market participants would use in
pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, IFRS 13 establishes a fair
value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of
the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumptions
about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy).
• Level 1 inputs utilise quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability
to access.
• Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or
indirectly. Level 2 inputs may include quoted prices for similar assets and liabilities in active markets, as well as inputs that are observable
for the asset or liability (other than quoted prices), such as interest rates, foreign exchange rates, and yield curves that are observable at
commonly quoted intervals.
• Level 3 inputs are unobservable inputs for the asset or liability, which are typically based on an entity’s own assumptions, as there is little,
if any, related market activity. In instances where the determination of the fair value measurement is based on inputs from different levels
of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest
level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular
input to the fair value measurement in its entirety requires judgement and considers factors specific to the asset or liability.
Assets held for sale
Assets categorised as held for sale are held on the Consolidated Statement of Financial Position at the lower of the book value and fair
value less costs to sell. This assessment is carried out when assets are transferred to held for sale. The impact of any adjustment as a part
of this assessment is booked through the Consolidated Income Statement.
Cash and cash equivalents
Cash comprises cash in hand, balances with banks and on-demand deposits. Cash equivalents are short-term, highly liquid investments
that are readily convertible to known amounts of cash. They include short-term deposits originally purchased with maturities of three
months or less.
Trade receivables
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost and principally comprise amounts
due from credit card companies and from e-payment companies. The Group has applied IFRS 9’s simplified approach and has calculated
the ‘expected credit losses’ (ECLs) based on lifetime of expected credit losses. Bad debts are written off when there is objective evidence
that the full amount may not be collected.
Equity
Equity issued by the Company is recorded as the proceeds received from the issue of shares, net of direct issue costs.
Treasury shares
Own equity instruments that are reacquired (treasury shares) are recognised at cost and deducted from equity. No gain or loss is
recognised in profit or loss on the purchase, sale, issue or cancellation of the Group’s own equity instruments. Any difference between the
carrying amount and the consideration, if reissued, is recognised in the share premium account.
Dividends
Dividends are recognised when they become legally payable. In the case of interim dividends to equity shareholders, this is when declared
by the Board of Directors and paid. In the case of final dividends, this is when approved by the shareholders at the Annual General
Meeting.
Equity-settled share benefit charges
Where the Company grants its employees or contractors shares or options, the cost of those awards, recognised in the Consolidated
Income Statement over the vesting period with a corresponding increase in equity, is measured with reference to the fair value at the date
of grant. Market performance conditions are taken into account in determining the fair value at the date of grant. Non-market performance
conditions, including service conditions, are taken into account by adjusting the number of instruments expected to vest at each balance
sheet date so that, ultimately, the cumulative amount recognised over the vesting period is based on the number of instruments that
eventually vest.
112
888 HOLDINGS PLC 1 ACCOUNTING POLICIES CONTINUED
Cash-settled transactions
A liability is recognised for the fair value of cash-settled transactions. The fair value is measured initially and at each reporting date up to
and including the settlement date, with changes in fair value recognised within employee benefits expenses. The fair value is expensed over
the period until the vesting date with recognition of a corresponding liability, further details of which are given in note 28. The approach
used to account for vesting conditions when measuring equity-settled transactions also applies to cash-settled transactions.
Severance pay schemes
The Group operates two severance pay schemes:
Defined benefit severance pay scheme
The Group operates a defined benefit severance pay scheme pursuant to the Severance Pay Law in Israel. Under this scheme Group
employees are entitled to severance pay upon redundancy or retirement. The liability for termination of employment is measured using the
projected unit credit method.
Severance pay scheme surpluses and deficits are measured as:
• the fair value of plan assets at the reporting date; less
• plan liabilities calculated using the projected unit credit method, discounted to its present value using yields available for the appropriate
government bonds that have maturity dates appropriate to the terms of the liabilities.
Remeasurements of the net severance pay scheme assets and liabilities, including actuarial gains and losses on the scheme liabilities due
to changes in assumptions or experience within the scheme and any differences between the interest income and the actual return on
assets, are recognised in the Consolidated Statement of Comprehensive Income in the period in which they arise.
Defined contribution severance pay scheme
In 2017 the Group introduced a defined contribution plan pursuant to section 14 of the Severance Pay Law. Under this scheme the Group
pays fixed monthly contributions. Payments to defined contribution plans are charged as an expense as they fall due.
Borrowings
The Group records bank and other borrowings initially at fair value, which equals the proceeds received, or acquired in a business
transaction, net of direct issue costs, and subsequently at amortised cost. The Group accounts for finance charges, including premiums
payable on settlement or redemption and direct issue costs, using the effective interest rate method.
Derivatives and hedging activities
The Company enters into a variety of derivative financial instruments to manage its exposure to interest rate and foreign exchange rate
risks.
Derivatives are initially recognised at fair value at the date the derivative contracts are entered into and are subsequently remeasured to
their fair value at the end of each reporting period. The accounting for subsequent changes in fair value depends on whether or not the
derivative is designated for hedge accounting.
Hedge accounting
The Company designates certain derivatives as hedging instruments as either:
• hedges of a particular risk associated with the cash flows of recognised assets and liabilities and highly probable forecast transactions
(cash flow hedges); or
• hedges of the fair value of recognised assets or liabilities or a firm commitment (fair value hedges).
At the inception of the hedge relationship, the Company documents the relationship between the hedging instrument and the hedged item
along with its risk management objectives and its strategy for undertaking various hedge transactions. Furthermore, at the inception of the
hedge, and on an ongoing basis, the Company documents whether a hedging relationship meets the hedge effectiveness requirements
under IFRS 9 and whether there continues to be an economic relationship between the hedged item and the hedging instrument.
Cash flow hedges
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognised in other
comprehensive income and accumulated under the heading of cash flow hedge reserve. The gain or loss relating to the ineffective portion
is recognised immediately within profit and loss.
Amounts previously recognised in other comprehensive income are reclassified to earnings in the periods when the hedged item is
recognised in profit and loss. These earnings are included within the same line of the Consolidated Income Statement as the recognised
hedged item. However, when the hedged forecast transaction results in the recognition of a non-financial asset or a non-financial liability,
the gains and losses previously recognised in other comprehensive income and accumulated in equity are transferred from equity and
included in the initial measurement of the cost of the non-financial asset or non-financial liability.
Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, or exercised, or when it no longer meets the
criteria for hedge accounting. Any gain or loss recognised in the cash flow hedge reserve remains in equity and is recognised in profit or
loss when the forecast transaction is ultimately recognised in profit or loss. When a forecast transaction is no longer expected to occur, the
gain or loss accumulated in equity is recognised immediately in profit or loss.
113
ANNUAL REPORT & ACCOUNTS 2023 STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SUPPLEMENTARY INFORMATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
For the year ended 31 December 2023
1 ACCOUNTING POLICIES CONTINUED
Hedge accounting continued
Derivatives that do not qualify for hedge accounting
Certain derivative instruments do not qualify for hedge accounting. Changes in the fair value of any derivative instrument that does not
qualify for hedge accounting are recognised immediately in profit or loss and are included in finance income/expense.
Leasing
At inception of a contract, the Group considers whether the contract is, or contains, a lease. A contract is, or contains, a lease if the
contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
The Group recognises a right-of-use asset and a lease liability at the lease commencement date. The lease liability is initially measured at
the present value of the lease payments that have not been paid at the commencement date, discounted using an appropriate discount
rate. The discount rate used to calculate the lease liability is the rate implicit in the lease, if it can be readily determined, or the lessee’s
incremental borrowing rate if not. The Group uses an incremental borrowing rate for its leases, which is determined based on the margin
requirements of the Group’s revolving credit facilities as well as country specific adjustments. A right-of-use asset is also recognised equal
to the lease liability and depreciated over the period from the commencement date to the earlier of the end of the useful life of the right-
of-use asset or the lease term. The Group has assessed the lease term of properties within its retail estate to be up to the first available
contractual break within the lease. The Group has deemed that it cannot be reasonably certain that it will continue beyond this time given
the continued uncertainty surrounding the Group’s retail business.
The Group has also applied the below practical expedients:
• exclude leases from measurement and recognition where the lease term ends within 12 months from the date of initial application and
account for those leases as short-term leases;
• exclude low value leases for lease values less than £5,000;
• apply a single discount rate to a portfolio of leases with similar characteristics;
• use hindsight to determine the lease term if the contract contains options to extend or terminate; and
• exclude initial direct lease costs in the measurement of the right-of-use asset.
The Group has a small number of sublet properties. In these instances, leases are classified as finance leases whenever the terms of the
lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases. Where
the Group is an intermediate lessor, the sublease classification is assessed with reference to the head lease right-of-use asset. Amounts
due from lessees under finance leases are recorded as receivables at the amount of the Group’s net investment in the lease. Finance lease
income is allocated to accounting periods to reflect a constant periodic rate of return on the Group’s net investment in the lease. Rental
income from operating leases is recognised on a straight-line basis over the term of the lease. IFRS 16 requires lessees to recognise right-of-
use assets and lease liabilities for most leases.
Trade and other payables
Trade and other payables are initially recognised at fair value and subsequently measured at amortised cost.
Provisions
Provisions are recognised when the Group has a present or constructive obligation as a result of a past event from which it is probable that
it will result in an outflow of economic benefits that can be reasonably estimated.
Liabilities to customers
Liabilities to customers comprise the amounts that are credited to customers’ bankroll (the Group’s electronic 'wallet'), including provision
for bonuses granted by the Group, less fees and charges applied to customer accounts, along with full progressive provision for jackpots.
These amounts are repayable in accordance with the applicable terms and conditions.
114
888 HOLDINGS PLC 2 SEGMENT INFORMATION
The Board has reviewed and confirmed the Group’s reportable segments in accordance with the requirements of IFRS 8 ‘Operating
Segments’. The segments disclosed below are aligned with the reports that the Group’s Chief Executive Officer and Chief Financial Officer
as Chief Operating Decision Makers review to make strategic decisions.
The Retail segment comprises all activity undertaken in LBOs including gaming machines. The UK&I Online segment comprises all online
activity, including sports betting, casino, poker and other gaming products along with telephone betting services that are incurred within
the UK and Ireland. The International segment comprises all online activity, including sports betting, casino, poker and other gaming
products along with telephone betting services that are incurred within all territories excluding the UK and Ireland. There are no inter-
segmental sales within the Group.
Segment performance is shown on an adjusted EBITDA basis, with a reconciliation from adjusted EBITDA to statutory results for clarity.
Information for the year ended 31 December 2023 is as follows:
2023
Revenue1
Gaming duties and other cost of sales
Adjusted gross profit
Marketing
Contribution
Operating expenses
Associate income
Adjusted EBITDA
Depreciation
Amortisation (excluding acquired intangibles)
Amortisation of acquired intangibles
Exceptional items
Fair value gain on financial assets
Share benefit credit
Foreign exchange
Finance expenses
Finance income
Loss before tax
Retail
£m
535.0
(115.4)
419.6
(6.5)
413.1
(314.2)
—
98.9
UK&I Online
£m
International
£m
Corporate
£m
658.5
(246.6)
411.9
(134.5)
277.4
(125.1)
—
152.3
517.4
(207.2)
310.2
(96.8)
213.4
(114.0)
—
99.4
—
—
—
—
—
(43.7)
1.4
(42.3)
Total
£m
1,710.9
(569.2)
1,141.7
(237.8)
903.9
(597.0)
1.4
308.3
(46.3)
(67.7)
(114.3)
(52.6)
4.1
0.5
1.0
(195.3)
41.0
(121.3)
1. Revenue recognised under IFRS 9 is £535.0m in Retail, £658.5m in UK&I Online and £486.9m in International. Revenue recognised under IFRS 15 is £nil in
Retail, £nil in UK&I Online and £30.5m in International.
Total segment assets
Total segment liabilities
Included within total segment assets:
Goodwill
Interests in associates
Capital additions
Retail
£m
516.2
173.3
99.4
—
4.6
UK&I Online
£m
International
£m
Corporate
£m
1,292.4
265.7
357.9
—
11.2
759.3
219.6
306.0
—
66.3
89.4
1,829.9
—
33.9
2.2
Total
£m
2,657.3
2,488.5
763.3
33.9
84.3
115
ANNUAL REPORT & ACCOUNTS 2023
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SUPPLEMENTARY INFORMATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
For the year ended 31 December 2023
2 SEGMENT INFORMATION CONTINUED
2022
Revenue1
Gaming duties and other cost of sales
Adjusted gross profit
Marketing
Contribution
Operating expenses
Associate income
Adjusted EBITDA
Depreciation
Amortisation (excluding acquired intangibles)
Amortisation of acquired intangibles
Exceptional items — cost of sales and operating
expenses
Share benefit charge
Foreign exchange
Finance expenses
Finance income
Loss before tax
Retail
£m
UK&I Online
£m
International
£m
255.5
(55.0)
200.5
(3.3)
197.2
(156.0)
—
41.2
455.5
(163.7)
291.8
(148.1)
143.7
(82.1)
—
61.6
508.3
(184.7)
323.6
(105.2)
218.4
(100.1)
—
118.3
Other2
£m
19.5
(10.5)
9.0
(2.5)
6.5
(4.8)
—
1.7
Corporate
£m
—
—
—
—
—
(5.2)
0.3
(4.9)
Total
£m
1,238.8
(413.9)
824.9
(259.1)
565.8
(348.2)
0.3
217.9
(30.8)
(32.8)
(56.7)
(93.2)
(5.2)
(4.0)
(111.7)
0.8
(115.7)
1. Revenue recognised under IFRS 9 is £255.5m in Retail, £455.5m in UK&I Online, £502.7m in International and £10.9m in Other. Revenue recognised under IFRS
15 is £nil in Retail, £nil in UK&I Online, £5.6m in International and £8.6m in Other.
2. ‘Other’ represents the Bingo business that was disposed of during 2022. See note 16 for further information.
Total segment assets
Total segment liabilities
Included within total assets:
Goodwill
Interests in associates
Capital additions
Retail
£m
542.6
176.3
99.4
—
13.4
UK&I Online
£m
International
£m
Corporate
£m
1,394.9
341.6
359.8
—
24.6
973.2
578.0
338.1
—
68.3
11.7
1,458.7
—
38.4
1.1
Total
£m
2,922.4
2,554.6
797.3
38.4
107.4
Geographical information
The Group’s performance can also be reviewed by considering the geographical markets and geographical locations within which the
Group operates. This information is outlined below:
Revenue by geographical market (based on location of customer)
United Kingdom & Ireland
Rest of World
Italy
Spain
Non-current assets by geographical location
United Kingdom & Ireland
Gibraltar
Rest of World
116
2023
£m
1,193.5
274.6
149.9
92.9
1,710.9
2023
£m
495.8
1,130.5
635.2
2,261.5
2022
£m
711.9
343.1
116.4
67.4
1,238.8
2022
£m
536.0
1,194.3
732.9
2,463.2
888 HOLDINGS PLC
3 EXCEPTIONAL ITEMS AND ADJUSTMENTS
In determining the classification and presentation of exceptional items we have applied consistently the guidelines issued by the Financial
Reporting Council (FRC) that primarily addressed the following:
• Consistency and even-handedness in classification and presentation;
• Guidance on whether and when recurring items should be considered as part of underlying results; and
• Clarity in presentation, explanation and disclosure of exceptional items and their relevance.
In preparing the Annual Report and Accounts, we also note the European Securities and Markets Authority (ESMA) guidance on Alternative
Performance Measures (APM), including:
• Clarity of presentation and explanation of the APM;
• Reconciliation of each APM to the most directly reconcilable financial statement caption;
• APMs should not be displayed with more prominence than statutory financials;
• APMs should be accompanied by comparatives; and
• The definition and calculation of APMs should be consistent over time.
We are satisfied that our policies and practice conform to the above guidelines.
Adjusted results
The Group reports adjusted results, both internally and externally, that differ from statutory results prepared in accordance with IFRS.
These adjusted results, which include our key metrics of adjusted EBITDA and adjusted EPS, are considered to be a useful reflection of the
underlying performance of the Group and its businesses, since they exclude items which impair visibility of the underlying activity in each
segment. More specifically, visibility can be impaired in one or both of the following instances:
• a transaction is of such a material or infrequent nature that it would obscure an understanding of underlying outcomes and trends in
revenues, costs or other components of performance (for example, a significant impairment charge); or
• a transaction that results from a corporate activity that has neither a close relationship to the Group’s operations nor any associated
operational cash flows (for example, the amortisation of intangibles recognised on acquisitions).
Adjusted results are used as the primary measures of business performance within the Group and align with the results shown in
management accounts, with the key uses being:
• management and Board reviews of performance against expectations and over time, including assessments of segmental performance
(see note 2 and the Strategic Report);
• in support of business decisions by the Board and by management, encompassing both strategic and operational levels of decision-
making.
The Group’s policies on adjusted measures are consistently applied over time, but they are not defined by IFRS and, therefore, may differ
from adjusted measures as used by other companies.
The Consolidated Income Statement presents adjusted results alongside statutory measures, with the reconciling items being itemised and
described below. We discriminate between two types of reconciling items: exceptional items and adjusted items.
117
ANNUAL REPORT & ACCOUNTS 2023 STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SUPPLEMENTARY INFORMATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
For the year ended 31 December 2023
3 EXCEPTIONAL ITEMS AND ADJUSTMENTS CONTINUED
Exceptional items
Exceptional items are those items the Directors consider to be one-off or material in nature that should be brought to the reader’s attention
in understanding the Group’s financial performance.
Exceptional items are as follows:
Cost of sales
Retroactive duties and associated credit
Exceptional items — cost of sales
Operating expenses
Corporate transaction related (income)/costs
Integration and transformation costs
Regulatory provisions and other associated costs
Impairment of US goodwill and other assets
Revaluation of contingent consideration
Exceptional items — operating expenses
Finance expenses
Senior Unsecured Notes early redemption fees
Gain on settlement of Senior Unsecured Notes
Exceptional items — finance expenses
Total exceptional items before tax
Tax on exceptional items
Total exceptional items
2023
£m
—
—
(0.1)
49.3
3.4
—
—
52.6
—
—
—
52.6
(9.0)
43.6
2022
£m
(3.9)
(3.9)
36.2
14.4
—
55.7
(9.2)
97.1
14.1
(7.1)
7.0
100.2
2.8
103.0
Total exceptional items in the year were £43.6m in 2023 compared to £103.0m in 2022.
Exceptional items are defined as those items which are considered to be one-off or material in nature to be brought to attention to better
understand the Group’s financial performance. Comparatives are included even when not individually material to aid comparability. Refer
to Appendix 1 to the financial statements for further detail.
Retroactive gaming duties and associated charges
The industry in which the Group operates is subject to continuing scrutiny by regulators and other governmental authorities, which may,
in certain circumstances, lead to enforcement actions, sanctions, fines and penalties or the assertion of private litigations, claims and
damages. In 2022, a net credit of £3.9m was recognised in respect to exceptional provision for retroactive duties and associated charges
following a reassessment of potential gaming duties relating to activity in prior years.
Corporate transaction related costs
The Group has incurred legal and M&A costs, including in relation to the disposal of its Latvia and Colombia businesses of £0.8m. During
2023, income relating to the acquisition of William Hill was received from Caesars, amounting to £2.0m. During 2022, the Group incurred
£24.5m of costs associated with the acquisition of the international (non-US) business of William Hill and recognised an impairment loss of
£11.7m in relation to the disposal of 888 Bingo.
Integration and transformation costs
The Group has incurred a total of £49.3m of costs relating to the integration programme, including £14.7m of platform integration costs,
£8.3m of legal and professional costs, £10.8m of redundancy costs, £5.3m of relocation and HR related expenses, £4.7m of employee
incentives as part of the integration of William Hill and 888, and £3.8m of technology integration costs. During 2022, the Group incurred
£14.4m, including £5.8m of redundancy costs, £3.0m of legal and consultancy fees and £3.7m of platform separation and other integration
costs.
Regulatory provisions and other associated costs
The Group has paid £2.9m during the period related to a regulatory settlement with the Gibraltar regulator in relation to the previously
disclosed failings that we identified in our Middle East business. Further to this there was £0.5m of professional fees incurred relating to
this settlement.
118
888 HOLDINGS PLC 3 EXCEPTIONAL ITEMS AND ADJUSTMENTS CONTINUED
Impairment of US goodwill and other assets
During the prior year, as a part of the annual impairment review, management performed a value in use calculation to assess the
recoverable amount of the Group’s US business, using that business’s underlying cash flow forecasts. The recoverable amount was lower
than the book value of its net assets and, as such, the Group impaired the goodwill on the US business in full, totalling £25.7m. Additionally
as part of the integration, the business intends to use the existing 888 technology platform as the basis for the future platform of the Group
which led to a write off of the Unity platform, a proprietary technology system William Hill was building that is no longer needed, at a cost
of £28.1m. A further £1.4m of smaller technology assets were written off and £0.5m of 39 freehold assets were written off when reclassified to
held for sale at the prior year end, due to the assets being tested for impairment as a result of the transfer.
Revaluation of contingent consideration
As a part of the transaction agreement with Caesars for the purchase of William Hill, an amount of up to £100.0m consideration was
contingent subject to the enlarged Group hitting specific EBITDA metrics. This was assessed at fair value on acquisition at £9.6m and
revalued at 31 December 2022 to £0.4m, leading to a release in this contingent consideration of £9.2m in the prior period.
Senior Unsecured Notes early redemption fees
As part of the William Hill acquisition, the Group acquired certain Senior Unsecured Notes, £350.0m 4.875% due May 2023 and £350.0m
4.75% due May 2026. Subsequent to the acquisition, the £350.0m Note due May 2023 was fully redeemed as well as a partial redemption
amounting to £339.5m of the Note due May 2026. The total cost to the Group of settling the Notes consisted of £12.2m in early redemption
fees together with a combined £1.9m of unamortised finance fees, which were written off to the Consolidated Income Statement
immediately in the prior period on redemption of each note. All of the costs were considered as exceptional due to their one-off nature.
Gain on settlement of Senior Unsecured Notes
The Senior Unsecured Notes acquired in the acquisition of William Hill were accounted for at fair value. These Notes were settled in the prior
period, and as such the gain on settlement of these Notes of £7.1m was recognised in the prior period.
Adjusted items
Adjusted items are recurring items that are excluded from internal measures of underlying performance and which are not considered by
the Directors to be exceptional. This relates to the amortisation of specific intangible assets recognised in acquisitions, amortisation of
finance fees, fair value gain of financial assets, foreign exchange and share benefit charges. These items are defined as adjusted items as it
is believed it would impair the visibility of the underlying activities across each segment as it is not closely related to the businesses’ or any
associated operational cash flows. Each of these items are recurring and occur in each reporting period and will be consistently adjusted
in future periods. Adjusted items are all shown on the face of the Consolidated Income Statement in the reconciliations of adjusted EBITDA
and note 10 in the reconciliation of adjusted profit after tax.
4 SHARE OF RESULTS OF ASSOCIATES
Share of post-tax profit of equity accounted associate
2023
£m
1.4
2022
£m
0.3
The above represents the Group’s share of the results of Sports Information Services (Holdings) Limited (see note 14) for the year ended
31 December 2023 and the Group’s ownership of the associate in the comparative period 1 July 2022 to 31 December 2022.
5 OPERATING PROFIT
Operating profit is stated after charging/(crediting):
Gaming duties
Marketing expenses
Staff costs (including Executive Directors)
Exceptional items — cost of sales
Exceptional items — operating expenses
Depreciation (within operating expenses)
Amortisation (within operating expenses)
Note
6
3
3
13
12
2023
£m
372.0
237.6
342.3
—
52.6
46.3
182.0
2022
£m
256.3
257.8
227.4
(3.9)
97.1
30.8
89.5
119
ANNUAL REPORT & ACCOUNTS 2023 STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SUPPLEMENTARY INFORMATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
For the year ended 31 December 2023
5 OPERATING PROFIT CONTINUED
Auditor remuneration
Audit of Company
Audit of Group
Total fees for audit services
Audit-related assurance services — half year review
Other assurance services
Total assurance services
Other non-audit services
Total fees for non-audit services
Total fees
2023
£m
1.1
1.8
2.9
0.1
0.1
0.2
—
0.2
3.1
2022
£m
1.0
2.0
3.0
0.1
0.1
0.2
0.8
1.0
4.0
In the prior year, the auditor acted as reporting accountants in connection with the Company’s circular and prospectus for the acquisition
of William Hill International and Capital Raise that was published during Q2 2022. Total non-audit fees payable to Ernst & Young for
permissible non-audit services relating to the transaction were £0.8m.
6 STAFF COSTS
Staff costs, including Executive Directors’ remuneration, comprise the following elements:
Wages and salaries
Social security
Employee benefits and severance pay scheme costs
2023
£m
287.6
26.3
28.4
342.3
2022
£m
196.8
17.4
13.2
227.4
In the Consolidated Income Statement, total staff costs, including share benefit credit of £0.5m (2022: charge of £5.2m), are included within
operating expenses.
The average number of employees during the year was 11,634 (2022: 12,019).
Severance pay scheme — Israel
The Group has a defined contribution plan pursuant to section 14 of the Severance Pay Law under which the Group pays fixed contributions
and will have no legal or constructive obligation to pay further contributions if the fund does not hold sufficient amounts to pay all
employee benefits relating to employee service at the date of their departure. The Group recognised an expense in respect of contribution
to the defined contribution plan during the year of £1.3m (2022: £1.9m).
The Group’s employees in Israel, who are not subject to section 14 of the Severance Pay Law, are eligible to receive certain benefits from
the Group in specific circumstances on leaving the Group. As such the Group operates a defined benefit severance pay plan which requires
contributions to be made to separately administered funds. The funds are held by an independent third-party Company.
The current service cost and the present value of the defined benefit obligation are measured using the projected unit credit method.
Under this schedule, the Company contributes on a monthly basis at the rate of 8.3% of the aggregate of members’ salaries.
The disclosures set out below are based on calculations carried out as at 31 December 2023 by a qualified independent actuary.
The following table summarises the employee benefits figures as included in the consolidated financial statements:
Included in the Statement of Financial Position:
Severance pay liability
Included in the Income Statement:
Current service costs (within operating expenses)
Included in the Statement of Comprehensive Income:
Gain/(loss) on remeasurement of severance pay scheme liability
120
2023
£m
0.6
1.3
0.2
2022
£m
1.2
1.9
(2.3)
888 HOLDINGS PLC 6 STAFF COSTS CONTINUED
Severance pay scheme — Israel continued
Movement in severance pay scheme assets and liabilities:
Severance pay scheme assets
At beginning of year
Interest income
Contributions by the Group
Benefits paid
Return on assets less interest income already recorded
Exchange differences
At end of year
Severance pay scheme liabilities
At beginning of year
Interest expense
Current service costs
Benefits paid
Actuarial loss/(gain) on past experience
Actuarial gain on changes in financial assumptions
Exchange differences
At end of year
2023
£m
16.2
0.7
1.6
(4.9)
(0.1)
(1.0)
12.5
2023
£m
17.4
0.8
1.2
(5.2)
0.3
(0.1)
(1.3)
13.1
2022
£m
19.2
0.6
1.9
(4.2)
(1.0)
(0.3)
16.2
2022
£m
23.0
0.7
1.8
(4.4)
(0.2)
(3.1)
(0.4)
17.4
As at 31 December 2023, the net accounting deficit of the defined benefit severance pay plan was £0.6m (2022: £1.2m). The scheme
is backed by substantial financial assets amounting to £12.5m at 31 December 2023 (2022: £16.2m).
The impact of the severance deficit on the level of distributable reserves is monitored on an ongoing basis. Monitoring enables planning
for any potential adverse volatility and helps the Group to assess the likely impact on distributable reserves.
Employees can determine individually into which type of investment their share of the plan assets are invested, therefore the Group
is unable to accurately disclose the proportions of the plan assets invested in each class of asset.
The expected contribution for 2024 is £1.7m.
The main actuarial assumptions used in determining the fair value of the Group’s severance pay plan are shown below:
Discount rate (nominal)
Voluntary termination rate (range)
Inflation rates based on Israeli bonds
7 FINANCE INCOME
Interest income
Foreign exchange on financing activities
Total finance income
2023
%
5.9
0-17
2.6
2023
£m
4.6
36.4
41.0
2022
%
5.5
0-17
2.7
2022
£m
0.8
—
0.8
Foreign exchange on financing activities of £36.4m relates to the foreign exchange movement on the unhedged element of the Group’s
debt. In 2022, a loss of £22.7m was included in note 8.
121
ANNUAL REPORT & ACCOUNTS 2023 STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SUPPLEMENTARY INFORMATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
For the year ended 31 December 2023
8 FINANCE EXPENSES
Interest expenses related to lease liabilities
Bank loans and bonds
Amortisation of finance fees
Hedging activities
Foreign exchange on financing activities
Other finance charges and fees
Finance expenses — underlying
Senior Unsecured Notes early redemption fees
Gain on settlement of Senior Unsecured notes
Finance expenses — exceptional
Total finance expenses
9 TAXATION
Corporate taxes
Current taxation
UK corporation tax charge at 23.5%
Other jurisdictions taxation
Adjustments in respect of prior years
Deferred taxation
Origination and reversal of temporary differences
Recognition of previously unrecognised deductible temporary differences
Adjustments in respect of prior years
Taxation credit
Deferred taxation related to items recognised in OCI
Remeasurement of severance pay liability
Current taxation
UK corporation tax charge at 19.0%
Other jurisdictions taxation
Adjustments in respect of prior years
Deferred taxation
Origination and reversal of temporary differences
Adjustments in respect of prior years
Taxation expense
Deferred taxation related to items recognised in OCI
Remeasurement of severance pay liability
Note
3
3
2023
£m
6.9
175.8
—
12.1
—
0.5
195.3
—
—
—
195.3
2022
£m
3.0
74.9
0.1
3.3
22.7
0.7
104.7
14.1
(7.1)
7.0
111.7
2023
£m
0.7
22.0
(21.0)
1.7
(37.7)
(30.2)
1.3
(66.6)
(64.9)
—
2022
£m
6.5
17.8
1.3
25.6
(3.0)
(17.7)
(20.7)
4.9
0.6
The UK tax rate increased from 19% to 25% on 1 April 2023 giving an average UK tax rate for the year of 23.5%.
The effective tax rate in respect of ordinary activities before exceptional items for the year ended 31 December 2023 is 81.4% (2022: 20.0%).
The effective tax rate in respect of ordinary activities after exceptional items is 53.5% (2022: -4.2%).
Pillar Two legislation has been enacted, or substantively enacted, in certain jurisdictions in which the Group operates. The legislation will be
effective for the Group’s financial year beginning 1 January 2024. The Group is in scope of the enacted or substantively enacted legislation
and has performed an assessment of the Group’s potential exposure to Pillar Two income taxes.
122
888 HOLDINGS PLC 9 TAXATION CONTINUED
Corporate taxes continued
The assessment of the potential exposure to Pillar Two income taxes is based on the information available regarding the financial
performance of the constituent entities in the Group for the year ended 31 December 2023 and forecasts for the year ended
31 December 2024. Based on the assessment, the Group has identified potential exposure to Pillar Two income taxes in respect of
profits earned in Gibraltar, Malta, and Spain. The potential exposure comes from the constituent entities (mainly licensed operating
subsidiaries) in these jurisdictions where the expected Pillar Two effective tax rate is below 15%.
The Pillar Two effective tax rate is lower in these jurisdictions due to the Group being subject to tax at effective rates lower than 15% in
those countries (Gibraltar at 12.5%, Spain at 12.5%, and Malta at 5% after the distribution of profits).
Had the Pillar Two legislation been effective for the current year ending 31 December 2023, the restated effective tax rate under IFRS
would be approximately 49.5-51.5% which would have been 2-4% lower than the reported effective rate under IFRS of 53.5%. The rate
would be lower because the Group reports a tax credit on a loss and the tax credit would be reduced due to the Pillar Two income
tax charge. The impact on the effective tax rate under IFRS for the Group is mainly driven by top up taxes arising on profits earned
in Gibraltar, Malta, and Spain where the Pillar Two effective tax rate is lower than 15%. The impact on the effective tax rate in 2024 will
depend on factors such as revenues and costs.
The difference between the total tax charge shown above and the amount calculated by applying the standard rate of UK corporation
tax to the (loss)/profit before tax is as follows:
Loss before taxation
Standard tax rate in UK (23.5%)
Difference in effective tax rate in other jurisdictions
Expenses not allowed for taxation
Accrual of liabilities for uncertain tax positions
Deferred tax not recognised
Recognition of previously unrecognised deductible temporary differences
Difference in current and deferred tax rate
Tax on share of result of associate
Non-taxable income
Adjustments to prior years’ tax charges
Losses utilised previously not recognised for deferred tax
Total tax credit for the year
Loss before taxation
Standard tax rate in UK (19.0%)
Difference in effective tax rate in other jurisdictions
Expenses not allowed for taxation
Accrual of liabilities for uncertain tax positions
Tax on share of result of associate
Deferred tax not recognised
Difference in current and deferred tax rate
Non-taxable income
Adjustments to prior years’ tax charges
Total tax charge for the year
2023
£m
(121.3)
(28.5)
(15.4)
13.6
(1.8)
26.5
(30.3)
0.2
(0.3)
(8.8)
(19.7)
(0.4)
(64.9)
2022
£m
(115.7)
(22.0)
2.5
32.9
5.2
0.1
0.4
5.1
(2.9)
(16.4)
4.9
The difference in effective tax rates in other jurisdictions primarily reflects the lower effective tax rate in Gibraltar, Spain and Malta.
Expenses not allowed for tax purposes mainly relate to reduced availability of tax relief arising on costs incurred in the period. Deferred tax
not recognised mainly relates to restricted interest in the UK in respect of which no deferred tax asset can be recognised. Recognition of
previously unrecognised deductible temporary differences relates to recognition of a deferred tax asset for the Group's intangible assets.
See note 26 for further details. The prior year adjustments mainly relate to additional claims being made for tax allowances in Gibraltar for
2021. Non-taxable income mainly relates to fair value and accounting gains not taxable in Gibraltar and the UK.
123
ANNUAL REPORT & ACCOUNTS 2023 STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SUPPLEMENTARY INFORMATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
For the year ended 31 December 2023
10 EARNINGS PER SHARE
Basic earnings per share
Basic earnings per share (EPS) has been calculated by dividing the profit attributable to ordinary shareholders by the weighted average
number of shares in issue and outstanding during the year.
Diluted earnings per share
The weighted average number of shares for diluted earnings per share takes into account all potentially dilutive equity instruments granted,
which are not included in the number of shares for basic earnings per share. Potential ordinary shares are excluded from the weighted
average diluted number of shares when calculating IFRS diluted loss per share because they are anti-dilutive. The number of equity
instruments included in the diluted EPS calculation consist of 2,789,783 Ordinary Shares (2022: 6,235,340) and no market-value options
(2022: nil).
The number of equity instruments excluded from the diluted EPS calculation is 2,294,080 (2022: 1,986,155).
Loss for the period attributable to equity holders of the Parent (£m)
Weighted average number of Ordinary Shares in issue and outstanding
Effect of dilutive Ordinary Shares and share options
Weighted average number of dilutive Ordinary Shares
Basic loss per share (pence)
Diluted loss per share (pence)
2023
2022
(56.4)
448,166,792
2,789,783
450,956,575
(120.5)
426,536,392
6,235,340
432,771,732
(12.6)
(12.6)
(28.3)
(28.3)
The diluted loss per share in the current and prior year is the same as the basic loss per share as the potentially dilutive share options are
considered antidilutive as they would reduce the loss per share and therefore, they are disregarded in the calculation.
Adjusted earnings per share
The Directors believe that EPS excluding exceptional and adjusted items, tax on exceptional and adjusted items ('Adjusted EPS') allows
for a further understanding of the underlying performance of the business and assists in providing a clearer view of the performance
of the Group.
Adjusted profit after tax (£m)
Weighted average number of Ordinary Shares in issue
Weighted average number of dilutive Ordinary Shares
Adjusted basic earnings per share (pence)
Adjusted diluted earnings per share (pence)
An explanation of adjusted profit after tax is provided in Appendix 1.
The table below highlights the measures used to achieve Adjusted profit after tax:
Adjusted profit after tax
Exceptional items — cost of sales and operating expenses
Exceptional items — finance expenses
Fair value gain on financial assets
Amortisation of finance fees
Amortisation of acquired intangibles
Tax on exceptional and adjusted items
Foreign exchange gains/(losses)
Share benefit credit/(charge)
Loss attributable to non-controlling interests
Loss after tax
11 DIVIDENDS
2023
48.1
2022
64.2
448,166,792
450,956,575
426,536,392
432,771,732
10.7
10.7
15.1
14.8
Note
3
3,8
25
28
2023
£m
48.1
(52.6)
—
4.1
(17.2)
(114.3)
37.4
37.6
0.5
—
(56.4)
2022
£m
64.2
(93.2)
(7.0)
—
(7.4)
(56.7)
11.4
(26.7)
(5.2)
0.1
(120.5)
The Board of Directors does not recommend a final dividend to be paid in respect of the year ended 31 December 2023. No final dividend
was recommended as at 31 December 2022.
124
888 HOLDINGS PLC
12 GOODWILL AND OTHER INTANGIBLES
Cost or valuation
At 31 December 20221
Acquisition related adjustment2
Additions
Disposals
Effect of foreign exchange rates
At 31 December 2023
Amortisation and impairments:
At 31 December 2022
Amortisation charge for the year
Impairment charge for the year
Disposals
Effect of foreign exchange rates
At 31 December 2023
Carrying amounts
At 31 December 2023
At 31 December 2022
Brands,
customer
relationships
and licences
£m
Software
£m
Total
£m
1,230.8
—
2.0
(10.7)
(3.0)
1,219.1
73.5
90.8
—
(1.3)
(1.6)
161.4
403.3
—
58.9
—
(10.4)
451.8
149.6
91.2
0.6
—
(6.9)
234.5
2,457.1
(20.3)
60.9
(24.4)
(13.4)
2,459.9
248.8
182.0
0.6
(1.3)
(8.5)
421.6
Goodwill
£m
823.0
(20.3)
—
(13.7)
—
789.0
25.7
—
—
—
—
25.7
763.3
797.3
1,057.7
1,157.3
217.3
253.7
2,038.3
2,208.3
1. Since the disclosure of the provisional fair values for the acquisition of William Hill on 1 July 2022, an adjustment of £15.7m has been made to increase the
fair value of provisions, with a related £4.4m reduction in deferred tax liabilities, and an equivalent movement in goodwill. This adjustment has been made
after the 31 December 2022 year end accounts and during the measurement period. See note 16 for further details.
2. In the current year, but outside of the measurement period, management has identified £20.3m of additional deferred tax balances which were present at
acquisition. Management has deemed the adjustment to be qualitatively immaterial for restatement of prior year figures, as it does not impact the profit or
loss, net assets, cash flow, remuneration, the Group’s key performance indicators or any of the Group’s covenants. As such, the deferred tax balances have
been adjusted in the current year, with a corresponding adjustment to the acquisition goodwill.
Goodwill
Including the adjustment made in the current year, goodwill recognised on the acquisition of William Hill was £776.6m, as outlined
in note 16. Based on the estimated synergies from the combination, management has allocated this goodwill between Retail (£99.4m),
UK&I Online (£357.9m) and International (£319.3m). This represents the lowest level at which goodwill is monitored for internal management
purposes.
Brands, customer relationships and licences
This category of assets includes brands, customer relationships and licences primarily recognised in business combinations. As outlined
in note 16, in 2022 the Group acquired William Hill and recognised brands of £574.4m, customer relationships of £595.1m and licences of
£8.5m. These assets are being amortised over 20-30 years for brands, 7-13 years for customer relationships and 20 years for licences.
Software
This category relates to the cost of both acquired software, through purchase or acquisition, as well as the capitalisation of internally
developed software where the recognition criteria are met. Capitalised costs on projects that are works in progress amount to £44.8m at
year end (2022: £42.0m). On the acquisition of William Hill, the Group acquired software with a fair value of £226.2m. The software acquired
primarily consisted of proprietary software platforms owned by William Hill. Subsequent to the acquisition, the decision was made to
migrate a number of William Hill platforms onto the existing 888 platforms, resulting in an asset impairment of £29.5m in 2022. These assets
are being amortised over 3-5 years.
Impairment reviews
The Group performs an annual impairment review for goodwill, by comparing the carrying amount of goodwill and other relevant assets
with their recoverable amount. This is an area where the Directors exercise judgement and estimation, as noted on pages 125 and 126.
For the purposes of impairment testing under IAS 36, CGUs are grouped in order to reflect the level at which goodwill is monitored by
management. In the prior year, the Group completed the acquisition of William Hill and disposed of the Group’s Bingo business, which
changed the groups of CGUs to which goodwill is allocated and monitored. The goodwill generated from the acquisition of William Hill is
monitored in line with the Group’s segments, being Retail, UK&I Online and International.
Testing is carried out by allocating the carrying value of the assets to CGUs or group of CGUs and determining the recoverable amount
of those CGUs through value in use calculations. Where the recoverable amount exceeds the carrying value of the assets, the assets
are considered as not impaired. Value in use calculations are based upon estimates of future cash flows derived from the Group’s profit
forecasts by segments. Profit forecasts are derived from the Group’s annual strategic planning or similarly scoped exercise.
125
ANNUAL REPORT & ACCOUNTS 2023 STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SUPPLEMENTARY INFORMATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
For the year ended 31 December 2023
12 GOODWILL AND OTHER INTANGIBLES CONTINUED
Impairment reviews continued
The principal assumptions underlying our cash flow forecasts are as follows:
• management assumes that the underlying business model will continue to operate on a comparable basis, as adjusted for known
regulatory or tax changes and planned business initiatives; this does not include any capex projects or the benefits that arise from them
in line with IAS 36;
• management’s forecasts anticipate the continuation of recent growth or decline trends in staking, gaming net revenues and expenses, as
adjusted for changes in our business model or expected changes in the wider industry or economy;
• management assumes that the Group will achieve its target sports betting gross win margins as set for each territory, which
management bases upon its experience of the outturn of sports results over the long term, given the tendency for sports results to vary in
the short term but revert to a norm over a longer term; and
• in management’s annual forecasting process, expenses incorporate a bottom-up estimation of the Group’s cost base. For employee
remuneration, this takes into account staffing numbers and models by segment, while other costs are assessed separately by category,
with principal assumptions including an extrapolation of recent cost inflation trends and the expectation that the Group will incur costs in
line with agreed contractual rates.
The Board approved the 2024 budget for each segment in January 2024. Management prepared a three-year strategic forecast covering
years 2025 to 2027 using the same basis as the four-year strategic forecast covering years 2024 to 2027 that was approved by the
Board in the prior year. Additionally, management has prepared a separate forecast for the year 2028, incorporating long-term growth
projections based on the year 2027. These five years form the basis of our value in use calculation.
Cash flows beyond that five-year period were extrapolated using long-term growth rates as estimated for each group of CGUs separately.
The other assumptions incorporated into the Group’s impairment reviews are those relating to discount rates and long-term growth
assumptions, as noted below separately for each CGU or group of CGUs:
CGUs
Retail
UK&I Online
International
2023
Discount
rate
%
2023
Long-term
growth rate
%
2022
Discount
rate
%
2022
Long-term
growth rate
%
13.0
13.0
14.7
0.0
2.5
5.0
13.3
12.1
13.8
0.0
2.5
5.0
Discount rates are applied to each CGU or group of CGUs’ cash flows that reflect both the time value of money and the risks that apply to
the cash flows of that CGU or group of CGUs. Discount rates are calculated using the weighted average cost of capital formula based on
the CGU’s or group of CGUs’ leveraged beta. The leveraged beta is determined by management as the mean unleveraged beta of listed
gaming and betting companies, with samples chosen where applicable from comparable markets or territories as the CGU or group of
CGUs, leveraged to the Group’s capital structure. Further risk premia and discounts are applied, if appropriate, to this rate to reflect the risk
profile of the specific CGU or the group of CGUs relative to the market in which it operates. Our discount rates are calculated on a post-tax
basis and converted to a pre-tax basis using the tax rate applicable to each CGU or group of CGUs. Discount rates disclosed below are
pre-tax discount rates.
The long-term growth rates included in the impairment review do not exceed the observed long-term growth rate for each respective CGU
or group of CGUs.
Results of impairment reviews
The recoverable amount and headroom above carrying amount or impairment below carrying amount based on the impairment review
performed at 31 December 2023 for each CGU or group of CGUs are as follows:
CGUs
Retail
UK&I Online
International
US B2C
2023
Recoverable
amount
£m
2023
Headroom
£m
2022
Recoverable
amount
£m
2022
Headroom/
(impairment)
£m
559.4
1,551.8
1,119.0
n/a
71.1
419.6
493.6
n/a
668.6
1,534.5
1,725.2
19.4
165.5
359.3
996.2
(25.7)
Within the US CGU, specifically in the US B2C business, there is goodwill from a previous acquisition in the 888 Group, however this was fully
impaired in the previous financial year and therefore no longer requires an impairment assessment.
126
888 HOLDINGS PLC 12 GOODWILL AND OTHER INTANGIBLES CONTINUED
Sensitivity of impairment reviews
For the Retail group of CGUs, the following reasonably possible changes in assumptions upon which the recoverable amount was estimated
would lead to the following changes in the recoverable amount of the CGU or group of CGUs:
CGUs
Retail
10% fall in cash flows
1% increase in discount rate
Reduction in
recoverable
amount
£m
Remaining
headroom
£m
Reduction in
recoverable
amount
£m
Remaining
headroom
£m
(55.9)
15.1
(37.1)
34.0
Retail cash flows would have to fall by more than 12.7% before the value in use fell below the CGU carrying value. For the UK&I Online
and International groups of CGUs, no impairment would occur under any reasonable possible changes in assumptions upon which the
recoverable amount was estimated.
13 PROPERTY, PLANT AND EQUIPMENT
Cost
At 31 December 2022
Additions
Disposals
Effect of foreign exchange rates
At 31 December 2023
Accumulated depreciation
At 31 December 2022
Charge for the period
Disposals
Effect of foreign exchange rates
At 31 December 2023
Carrying amounts
At 31 December 2023
At 31 December 2022
Land and
buildings
£m
Fixtures,
fittings and
equipment
£m
Right-of-use
assets
£m
36.6
1.6
(10.2)
—
28.0
15.2
2.4
(5.7)
—
11.9
16.1
21.4
130.4
5.8
(3.9)
(0.4)
131.9
41.4
17.1
(1.8)
(0.4)
56.3
75.6
89.0
113.4
23.5
—
(0.8)
136.1
31.5
26.8
—
(0.2)
58.1
78.0
81.9
Total
£m
280.4
30.9
(14.1)
(1.2)
296.0
88.1
46.3
(7.5)
(0.6)
126.3
169.7
192.3
During the year, the Group sold a number of freehold properties for a total of £22.6m in sale and leaseback transactions, resulting in a
gain on disposal of £4.6m. At 31 December 2022 the Group held £6.9m of land and buildings as assets held for sale in relation to these
transactions.
The net book value of land and buildings comprises:
Freehold
Long leasehold improvements
Short leasehold improvements
2023
£m
1.5
4.8
9.8
16.1
2022
£m
3.7
5.9
11.8
21.4
127
ANNUAL REPORT & ACCOUNTS 2023
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SUPPLEMENTARY INFORMATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
For the year ended 31 December 2023
14 INTEREST IN ASSOCIATE
The Group holds an associate interest in Sports Information Services (Holdings) Limited (SIS). The Group uses the equity method of
accounting for associates. The following table shows the aggregate movement in the Group’s interests in its associate:
At 31 December 2022
Share of results before interest and taxation
Share of interest
Share of taxation
Dividend received
At 31 December 2023
£m
38.4
1.7
0.3
(0.6)
(5.9)
33.9
SIS
At 31 December 2023, William Hill Organization Limited, a principal subsidiary of the Company, held an investment of 19.5% of the ordinary
share capital of SIS, a Company incorporated in Great Britain. The Group is able to exert significant influence over SIS by way of its 19.5%
holding and its seat on the Board of Directors.
The SIS group of companies provides real time, pre-event information and results, as well as live coverage of horseracing, greyhound racing
and other sporting activities and events via satellite. The statutory financial statements of SIS are prepared to the year ending 31 March.
The results recognised are based on statutory accounts to March 2023 and management accounts thereafter.
The following financial information relates to SIS as at and for the year ended 31 December 2023:
Total assets
Total liabilities
Total revenue
Total profit after tax
£m
85.0
(52.1)
241.6
8.7
15 INVESTMENTS
Good Luck Have Fun Group AB (‘GLHF Group’) shares
On 1 July 2022, as a part of the acquisition of William Hill, the Group obtained an investment in Good Luck Have Fun Group AB. The
Group has a 4.3% holding in the equity in GLHF Group and it is held as a financial asset and designated as fair value through other
comprehensive income, in line with the previous William Hill designation. Subsequent to the acquisition, and as a result of updates in the
strategy by the GLHF Group management team, the Group considered the recoverability of the investment. As a part of this assessment
of recoverability, the Group wrote off the investment of £1.0m in its entirety through other comprehensive income in the prior period.
At 31 December 2023, the Group holds £nil value in this investment (2022: £nil).
128
888 HOLDINGS PLC 16 ACQUISITIONS & DISPOSALS
Acquisitions
On 1 July 2022, the Group acquired all of the equity interests in William Hill. Total consideration for the transaction was £554.3m, consisting
of £544.7m cash consideration and up to £100.0m of contingent consideration, fair valued on acquisition date at £9.6m.
Identifiable assets acquired and liabilities assumed
Intangible assets
Property, plant and equipment
Right-of-use assets
Investment in sublease
Investments and investments in associates
Cash and cash equivalents
Trade and other receivables
Income tax asset
Assets held for sale
Trade and other payables
Provisions and contingent liabilities1
Derivative financial instruments
Lease liabilities
Retirement benefit liability
Deferred tax liabilities
Long-term debt
Total net identifiable liabilities
Goodwill
Consideration transferred
Final
fair value
1,404.2
109.5
72.3
1.4
40.0
157.9
32.9
10.8
0.2
(399.3)
(194.5)
(3.5)
(76.6)
(0.4)
(211.5)
(1,165.7)
(222.3)
776.6
554.3
1. Since the disclosure of the provisional fair values in the 31 December 2022 year end accounts, and during the measurement period, an adjustment of £15.7m
has been made to increase the fair value of provisions, with a related £4.4m reduction in deferred tax liabilities, and an equivalent movement in goodwill.
In the current year but outside of the measurement period, management has identified £20.3m of additional deferred tax balances which were present at
acquisition. Management has deemed the adjustment to be qualitatively immaterial for restatement of prior year figures, as it does not impact the profit or
loss, net assets, cash flow, remuneration, the Group’s key performance indicators or any of the Group’s covenants. As such, the deferred tax balances have
been adjusted in the current year, with a corresponding adjustment to the acquisition goodwill.
Intangible assets
Acquired identifiable intangible assets include £574.4m in respect of brands, £595.1m in respect of customer relationships and £8.5m in
respect of licences. Software and technology of £226.2m, inclusive of a fair value uplift of £70.6m, has also been recognised on acquisition
in the prior year. Management considers the residual goodwill of £776.6m to represent a number of factors including the future growth of
the William Hill business and the potential to achieve buyer-specific synergies and workforce.
The fair value of the brand assets was assessed by considering the benefit to the Group’s future revenue of the acquired brand and
assessing the royalty costs that would be incurred in deriving the same benefit. The key assumptions in the assessments are the forecast
revenue growth and royalty cost applied. A royalty cost of 5.0% of revenue was applied. The fair value of the customer relationships was
assessed using the multi-period excess earnings methodology. The key assumption in the assessments is customer retention rates. The
fair value of the licences has been derived by calculating a replacement cost for each individual licence. A 5% increase/(decrease) in
estimated customer churn rates would (decrease)/increase the fair value of customer relationships by £(123.0)m/£176.0m respectively.
Provisions and contingent liabilities
A contingent liability with a fair value of £80.6m has been recognised in the prior year on acquisition to reflect the possible future economic
outflow resulting from customer claims in Austria. The contingent liability has been fair valued in line with IFRS 3 based on the expected
cash outflow of settled claims and recognised on the basis that it is a possible future liability. Additional provisions of £115.2m have been
recognised based on pre-existing provisions within William Hill. The carrying amount at acquisition was assessed to be the fair value. Refer
to note 22 for further details on these acquired provisions.
Following receipt of updated advice, the development of case law in Germany indicates that the courts may apply a more customer-
friendly approach to the application of the three-year limitation period and link the commencement of the limitation period to the player’s
first positive knowledge of a claim to recover his gambling losses. The law permits a maximum limitation period of 10 years in this scenario.
As such, during 2023 and within the purchase price accounting measurement period, we have re-assessed the value of the provision for
customer claims in Germany as at the acquisition date. This has led to an increase in the provision of £15.7m to a total value of £23.4m.
This has been recognised through the opening balance sheet on acquisition, leading to an equivalent increase in goodwill on acquisition.
129
ANNUAL REPORT & ACCOUNTS 2023
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SUPPLEMENTARY INFORMATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
For the year ended 31 December 2023
16 ACQUISITIONS & DISPOSALS CONTINUED
Other fair value adjustments
A fair value uplift of £1.1m has been recognised on property, plant and equipment, representing the depreciated replacement cost of the
assets in comparison to their pre-acquisition net book value.
A fair value uplift of £0.8m has been recognised on the acquired right-of-use assets, representing favourable market positions on William
Hill’s portfolio of leases. This has been offset by a £6.8m reduction to the right-of-use asset and £6.4m reduction to the lease liability that
reflects matching the right-of-use asset to the new fair value of the lease liability, based on a new discount rate for the liability at the
acquisition date.
The fair value of the Group’s investment in SIS (refer to note 14) was increased by £27.4m to a fair value of £39.0m, reflecting the Group’s
holding and the estimated market value of the entity at the acquisition date.
The fair value of the Group’s outstanding listed debt was increased by £7.1m, reflecting the current market price of the debt at acquisition
date.
Deferred tax liabilities of £192.2m have been recognised on the resultant fair value uplifts to assets.
The fair value of all other assets and liabilities acquired are considered to be equal to their net book value as at the acquisition date.
Disposals
2023
On 22 May 2023, the Group agreed to sell its Latvian business to Paf Consulting Abp. On 13 June 2023, the deal with Paf Consulting Abp
completed. The cash consideration for the Latvian business was £19.5m, of which £0.9m is a working capital adjustment. As a part of the
deal, the Group agreed an earn out with Paf Consulting Abp, under which the Group would receive further consideration of up to €4.25m.
As this is deemed to hold a fair value of £nil this has not been recorded in these financial statements. The Group sold net assets totalling
£20.2m, leading to a loss on disposal of £0.7m. These net assets were made up of goodwill and other intangible assets of £23.1m, other net
assets totalling £1.0m, non-controlling interests of £0.5m offset by deferred tax liabilities totalling £4.4m.
On 1 August 2023, the Group sold its 90% holding in its Colombian business Alfabet S.A.S. to Vivo Aladdin Online S.A.S. for £0.6m,
recognising a gain of £0.4m on disposal.
2022
On 7 July 2022, the Group disposed of its entire Bingo business to Saphalata Holdings Ltd., a member of the Broadway Gaming group, for
a total cash consideration of £37.4m (US$45.25m), out of which £35.7m was paid on completion and a further £1.7m will unconditionally
be paid in one year. As at 30 June 2022, the Group reclassified the Bingo business assets and liabilities as ‘held for sale’, at which time an
impairment loss of £11.2m was recognised on the Bingo goodwill, representing the difference between the carrying value of the business's
net assets and the fair value at the date of reclassification to held for sale.
Consideration received
Deferred consideration
Less:
Cash disposed of
Net proceeds on disposal
Less:
Net assets disposed of (excluding cash):
Intangible assets
Trade and other receivables
Trade and other payables
Net assets disposed of (excluding cash)
Loss on disposal
17 ASSETS HELD FOR SALE
£m
35.7
1.7
(3.2)
34.2
(37.6)
(0.5)
3.3
(34.7)
(0.5)
In the prior year, the Group had freehold properties amounting to £6.9m classified as assets held for sale as they were in the process of
being auctioned as part of a sale and leaseback transaction. In the current year all the properties that were held for sale have been sold
and as such there are no assets classified as held for sale at the year end.
130
888 HOLDINGS PLC 18 LEASES
The Group recognises a right-of-use asset and a lease liability at the lease commencement date.
The lease liability is initially measured at the present value of the lease payments that have not been paid at the commencement date,
discounted using an appropriate discount rate. The discount rate used to calculate the lease liability is the rate implicit in the lease, if it can
be readily determined, or the lessee’s incremental borrowing rate if not. The Group uses an incremental borrowing rate for its leases, which
is determined based on a series of inputs including a risk-free rate based on our debt portfolio as well as country-specific adjustments.
A right-of-use asset is also recognised equal to the lease liability and depreciated over the period from the commencement date to the
earlier of the end of the useful life of the right-of-use asset or the lease term.
The Group has assessed the lease term of properties within its Retail estate to be up to the first available contractual break within the
lease. The Group has deemed that it cannot be reasonably certain that it will continue beyond this time given the continued uncertainty
surrounding the Retail business.
The Group note that leases not included due to either being low value or having a term of less than 12 months are deemed immaterial.
The Group has a small number of sublet properties which have been assessed in accordance with IFRS 16 and have been deemed
immaterial. The accounting policy applied to these small number of sublet properties can be seen on page 114.
The Group will continue to monitor both the above scenarios and disclose these if they are deemed material to users of the Annual Report
and Accounts.
A reconciliation of the movement in lease liabilities is as follows:
As at 31 December 2022
Additions
Interest expense
Payment of lease liabilities
Foreign exchange
As at 31 December 2023
A maturity analysis of the contractual undiscounted cash flows is as follows:
Due within one year
Due between one and two years
Due between two and three years
Due between three and four years
Due between four and five years
Due beyond five years
19 TRADE AND OTHER RECEIVABLES
Trade receivables
Other receivables
Loans receivable
Prepayments
Restricted short-term deposits
Current trade and other receivables
Non-current prepayments
Total trade and other receivables
£m
89.0
24.5
6.9
(31.8)
(1.0)
87.6
2022
£m
29.4
23.0
17.3
13.4
7.5
8.7
2022
£m
56.7
18.4
3.9
32.1
21.6
132.7
6.2
138.9
2023
£m
29.7
22.8
17.3
11.3
6.1
10.5
2023
£m
64.0
13.0
1.5
36.9
22.6
138.0
2.8
140.8
Restricted short-term deposits represent amounts held by banks primarily to support guarantees in respect of regulated markets licence
requirements and office leases.
Non-current prepayments refer to prepayment to partners in relation to costs and certain fees to be recognised over a period longer than
12 months. Any discounting on the timing of these prepayments is immaterial.
The carrying value of trade receivables and other receivables are net of expected credit losses which approximates to their fair value,
due to the short-term nature of the receivables they are not subject to ongoing fluctuations in market rates. Note 24 provides credit risk
disclosures on trade and other receivables.
131
ANNUAL REPORT & ACCOUNTS 2023
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SUPPLEMENTARY INFORMATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
For the year ended 31 December 2023
20 CASH AND CASH EQUIVALENTS
Cash and cash equivalents
Less:
Customer deposits
Cash (excluding customer balances)
Customer deposits represent bank deposits matched by liabilities to customers of an equal value (see note 21).
21 TRADE AND OTHER PAYABLES AND CUSTOMER DEPOSITS
Trade payables
Accrued expenses
Other payables
Total trade and other payables
2023
£m
256.2
127.8
128.4
2023
£m
83.2
211.2
80.3
374.7
2022
£m
317.6
141.3
176.3
2022
£m
61.1
208.0
98.9
368.0
The carrying value of trade and other payables approximates to their fair value given the short maturity date of these balances.
Customer deposits of £127.8m (2022: £141.3m) represents deposits received from customers, customer winnings and progressive prize pools.
This is offset by an equivalent or greater amount of cash held, which is included in cash and cash equivalents (see note 20). Due to the
material nature of this balance it is disclosed separate to trade and other payables in the Statement of Financial Position.
22 PROVISIONS
At 31 December 20221
Charged/(credited) to income statement
Additional provisions recognised
Provisions released to income statement
Utilised during the year
Transfers to trade and other payables2
Foreign exchange differences
At 31 December 2023
Indirect tax
provision
£m
Legal and
regulatory
£m
Shop closure
provision
£m
Other
restructuring
costs
£m
61.7
5.1
—
(2.3)
—
(1.7)
62.8
143.2
8.9
(3.8)
(27.8)
(3.6)
(0.5)
116.4
4.8
1.3
—
(2.5)
—
—
3.6
3.7
—
—
(1.3)
(1.9)
—
0.5
Total
£m
213.4
15.3
(3.8)
(33.9)
(5.5)
(2.2)
183.3
1. Since the disclosure of the provisional fair values in the 31 December 2022 year end financial statements and during the measurement period, an
adjustment of £15.7m has been made to increase the fair value of provisions, and an equivalent increase in goodwill.
2. During the year, a £1.9m provision which was previously categorised as other restructuring costs and a provision of £3.6m within legal and regulatory have
been transferred to accruals to better reflect the nature of the liability.
Customer claims provisions of £104.8m (2022: £101.9m) within legal and regulatory are classified as non-current. The remaining provisions
are all classified as current.
Indirect tax provision
As part of the acquisition of William Hill, the Group acquired a provision relating to a gaming tax liability in Austria, where the Austrian
tax authority believes that foreign gaming companies should be liable to pay gaming taxes in Austria. Post-acquisition, the Group has
continued to provide for the gaming taxes including interest, as management considers that an outflow is probable. The Group is in
constructive discussions with the Austrian tax authority over the timing of settlement.
132
888 HOLDINGS PLC 22 PROVISIONS CONTINUED
Legal and regulatory provisions
The Group has recorded a provision in respect of legal and regulatory matters, including customer claims, and updated it to reflect
the Group’s revised assessment of these risks in light of developments arising during 2023 such that this represents management’s best
estimate of probable cash outflows related to these matters.
The industry in which the Group operates is subject to continuing scrutiny by regulators and other governmental authorities, which may,
in certain circumstances, lead to enforcement actions, sanctions, fines and penalties or the assertion of private litigations, claims and
damages. Within the opening provision, there is a provision acquired relating to a periodic compliance assessment undertaken by the
UK Gambling Commission (UKGC) in July and August 2021 of the William Hill business. William Hill has been subject to an ongoing licence
review and has addressed certain action points raised by the UKGC in relation to William Hill’s social responsibility and anti-money
laundering obligations. The Group has agreed a regulatory settlement of £19.2m, including divestments of £0.7m. This provision was
acquired at 1 July 2022 and was settled during the year.
In common with other businesses in the gambling sector, the Group receives claims from consumers relating to the provision of gambling
services. Claims have been received from consumers in a number of (principally European) jurisdictions and allege either failure to follow
responsible gambling procedures, breach of licence conditions or that underlying contracts in question are null and void given local
licencing regimes.
Consumers who have obtained judgement against the Group’s entities in the Austrian courts have sought to enforce those judgements in
Malta and Gibraltar. These are being defended on the basis of a public policy argument. The provisions held for the Group relating to these
claims is £86.2m, which includes a provision of £80.6m relating to the William Hill and Mr Green brands and £5.6m relating to 888.
The calculation of the customer claims liability includes provision for both legal fees and interest but does not include any gaming taxes
that have already been paid on these revenues. Management have assessed that it is probable as opposed to virtually certain that the
tax will be reclaimed and therefore a contingent asset of up to £28.0m has been disclosed but not recognised for the tax reclaims.
The timing and amount of the outflows is ultimately determined by the settlement reached with the relevant authority.
Following receipt of updated advice, the development of case law in Germany indicates that the courts may apply a more customer-
friendly approach to the application of the three-year limitation period and link the commencement of the limitation period to the player's
first positive knowledge of a claim to recover his gambling losses. The law permits a maximum limitation period of 10 years in this scenario.
As such, during 2023 and within the purchase price accounting measurement period, we have re-assessed the value of the provision for
customer claims in Germany as at the acquisition date. This has led to an increase in the provision of £15.7m to a total value on acquisition
of £23.4m. This has been recognised through the opening balance sheet on acquisition, leading to an equivalent increase in goodwill on
acquisition.
During the year, the Group has utilised £3.5m of the overall provision as claims have been settled. In addition, a further charge of £6.2m has
been recognised to reflect the receipt of new claims.
Shop closure provisions
The Group holds provisions relating to the associated costs of closure of 713 shops in 2019, 119 shops in 2020, and certain shops that
ceased to trade as part of normal trading activities.
Other restructuring costs
The Group has recognised certain provisions for staff severance as a result of restructuring announced during the current and prior year.
23 BORROWINGS
Borrowings at amortised cost
Bank facilities
€473.5m term loan facility
$575.0m term loan facility
£150.0m Equivalent Multi-Currency Revolving Credit Facility
Loan Notes
€582.0m Senior Secured Fixed Rate Notes
€450.0m Senior Secured Floating Rate Notes
£350.0m Senior Unsecured Notes
Total Borrowings
Less: Borrowings as due for settlement in 12 months
Total Borrowings as due for settlement after 12 months
Interest rate
%
Maturity
2023
£m
2022
£m
EURIBOR + 5.25%
CME term SOFR + 5.35%
Benchmark rate + 3.5%
7.56
EURIBOR + 5.5%
4.75
2028
2028
2028
2027
2028
2026
385.6
401.6
—
489.6
373.8
10.5
1,661.1
3.9
1,657.2
392.6
420.7
—
498.6
379.9
10.5
1,702.3
4.8
1,697.5
133
ANNUAL REPORT & ACCOUNTS 2023
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SUPPLEMENTARY INFORMATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
For the year ended 31 December 2023
23 BORROWINGS CONTINUED
Bank facilities
Term loan facilities
In July 2022, the Group entered into a Senior Facilities Agreement in connection with the William Hill Group acquisition, under which the
following term loan facilities were made available:
• a six-year euro-denominated bullet term facility of €473.5m, of which €6.4m was repaid in September 2022.
• a six-year sterling-denominated delayed-draw bullet term facility of £351.8m which was partially drawn in September 2022 ('GBP Term
Loan') and used to partially prepay the William Hill Group’s £350m 4.75% Senior Unsecured Notes due 2026 and partially prepay the
Group’s euro-denominated bullet term facility.
• a six-year US Dollar-denominated term facility of $500.0m.
In December 2022, the GBP Term Loan was repaid and partially replaced with an increase of $75.0m under the Group’s six-year US Dollar-
denominated term facility, with the remaining amount replaced with Senior Secured Note issuances.
At 31 December 2023, the following amounts were outstanding under the term facilities made available to the Group under the Senior
Facilities Agreement:
• €467.1m (2022: €467.1m) under the Group’s six-year euro-denominated term facility.
• $568.8m (2022: $573.5m) under the Group’s six-year US Dollar-denominated term facility.
Loan notes
Senior Secured Notes
(i) €582m 7.558% Senior Secured Fixed Rate Notes due July 2027
In July 2022, as part of the William Hill Group acquisition funding, the Group issued €400m of guaranteed Senior Secured Fixed Rate Notes
and used the net proceeds to finance the William Hill Group acquisition. The notes, which are guaranteed by certain members of the Group
and certain of the Group’s operating subsidiaries, mature in July 2027.
In December 2022, a further €182m in principal amount was issued under the same terms as the initial €400m issuance and used to
partially refinance the GBP Term Loan.
(ii) €450m Senior Secured Floating Rate Notes due July 2028
In July 2022, the Group issued €300m of guaranteed Senior Secured Floating Rate Notes and used the net proceeds to partially finance
the William Hill Group acquisition. The notes, which are guaranteed by certain members of the Group and certain of the Group’s operating
subsidiaries, mature in July 2028.
In December 2022, a further €150m in principal amount was issued under the same terms as the initial €300m issuance to partially
refinance the GBP Term Loan.
Senior Unsecured Notes
£350m 4.875% Senior Unsecured Fixed Rate Notes due 2023 & £350m 4.75% Senior Unsecured Fixed Rate Notes due 2026
The Group acquired two separate listed Senior Unsecured Notes, due 2023 and 2026 respectively as at 1 July 2022. The acquisition
triggered a change in control and the exercise of a put option by a number of Noteholders (refer below). The £350m 4.875% Senior
Unsecured Notes due 2023 were settled in full and, on 22 September 2022, Noteholders of £339.5m out of £350.0m 4.75% Senior Unsecured
Notes due 2026 took the option to exercise. As a result, this reduced the £350.0m 4.75% Senior Unsecured Notes due 2026 to £10.5m at
31 December 2023 (2022: £10.5m). The cash purchase price of both notes was equal to 101% of the principal amount together with the
interest accrued.
Finance fees and associated costs incurred on the issue of both Notes were held in the William Hill Statement of Financial Position at
acquisition, which were subsequently fair valued which led to an increase of £7.1m, reflecting the current market price of the debt at
acquisition date. This is being amortised over the life of the respective notes using the effective interest rate method. On redemption of the
Notes, any unamortised fees were written off to the Income Statement as exceptional costs in the 2022 financial year (see note 3).
Change of control
Following the occurrence of a change of control, either (i) each lender under the Senior Facilities Agreement shall be entitled to require
prepayment of outstanding amounts and cancellation of its commitments within a prescribed time period or (ii) the Group may elect that
all outstanding undrawn commitments of each lender shall be cancelled and outstanding drawn commitments shall become due and
payable.
In addition, the Group will be required to make an offer to purchase all of the Fixed Rate Notes, the Floating Rate Notes and the 4.75%
Senior Unsecured Notes due 2026 as a result of such change of control at a price in cash equal to 101% of the aggregate principal amount
thereof plus accrued and unpaid interest.
134
888 HOLDINGS PLC 23 BORROWINGS CONTINUED
Undrawn credit facilities
At 31 December 2023, the Group had the following undrawn credit facilities:
£150m Equivalent Multi-Currency Revolving Credit Facility
In July 2022, as part of the William Hill Group acquisition, the Group entered into a new Senior Facilities Agreement under which its £50m
Revolving Credit Facility was replaced with a Multi-Currency Revolving Credit Facility. The replacement facility has an aggregate principal
amount of £150m with a five-and-a-half-year maturity (maturing in January 2028). The drawn balance on this facility at 31 December 2023
was £nil (2022: £nil).
Financial covenant
The Revolving Credit Facilities are subject to a Senior Facilities Agreement whereby any applicable revolving Incremental Senior Facilities
(together the 'Financial Covenant Facilities') are tested at every reporting period to ensure that they do not exceed a pre-agreed threshold
to be agreed with the Mandated Lead Arrangers prior to the entry into the Senior Facilities Agreement.
There are no other covenants on the Group debt, therefore the Directors are satisfied that, at the year-end, the net leverage ratio has not
exceeded the pre-agreed threshold and, as a consequence, the financial covenants have not been breached.
Overdraft facility
In July 2022, as part of the William Hill Group acquisition, the Group acquired an overdraft facility with National Westminster Bank plc of
£5.0m. The balance on this facility at 31 December 2023 was £nil (2022: £nil).
Weighted average interest rates
The weighted average interest rates paid, including commitment fees, were as follows:
€473.5m term loan facility
$575.0m term loan facility
€582.0m Senior Secured Fixed Rate Notes
€450.0m Senior Secured Floating Rate Notes
£350.0m Senior Unsecured Fixed Rate Notes
Borrowings reconciliation
2023:
Debt
2026 Senior Unsecured Notes
€473.5m term loan facility
$575.0m term loan facility
€582.0m Senior Secured Fixed Rate Notes
€450.0m Senior Secured Floating Rate Notes
2022:
Debt
2023 Senior Unsecured Notes
2026 Senior Unsecured Notes
£358.1 term loan facility
£461.5m asset bridge loan
€473.5m term loan facility
$575.0m term loan facility
€582.0m Senior Secured
Fixed Rate Notes
€450.0m Senior Secured
Floating Rate Notes
Opening
£m
—
—
—
—
—
—
—
—
—
Opening
£m
Repayments
£m
Non-cash
£m
10.5
392.6
420.6
498.7
379.9
1,702.3
—
—
(4.0)
—
—
(4.0)
—
2.9
7.4
2.9
3.6
16.8
Acquired
£m
Repayments
£m
Fees on
debt
£m
Non-cash
£m
FV
adjustment
£m
352.3
351.9
—
461.5
—
—
—
—
(349.0)
(339.0)
(347.0)
(461.5)
(5.7)
(1.0)
—
—
—
—
—
—
(23.5)
(57.4)
(18.9)
(20.3)
—
—
—
—
1.7
3.5
0.9
0.9
7.0
(3.3)
(2.4)
—
—
—
—
—
—
(5.7)
Inflows
£m
—
—
347.0
—
420.4
479.1
517.0
399.6
2,163.1
1,165.7
(1,503.2)
(120.1)
2023
%
10.01
13.49
8.44
9.95
4.75
FX
£m
—
(9.8)
(22.3)
(12.4)
(9.5)
2022
%
7.25
11.47
8.47
7.58
4.75
Total
£m
10.5
385.7
401.7
489.2
374.0
(54.0)
1,661.1
FX
£m
—
—
—
—
(0.3)
(3.6)
Total
£m
—
10.5
—
—
392.6
420.6
(0.3)
498.7
(0.3)
(4.5)
379.9
1,702.3
135
ANNUAL REPORT & ACCOUNTS 2023
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SUPPLEMENTARY INFORMATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
For the year ended 31 December 2023
24 FINANCIAL RISK MANAGEMENT
The Group’s activities expose it to a variety of financial risks. Financial risk management is primarily carried out by the Group’s Treasurer
with reference to risk management policies approved by the Board and supervised by the Chief Financial Officer. The Board approves
written principles for risk management. The principal financial risks faced by the Group comprise liquidity risk, refinancing risk, credit risk,
interest rate risk, currency risk and pensions risk. These risks are managed as described below.
The main financial instruments used by the Group, on which financial risk arises, are as follows:
• Cash and cash equivalents;
• Trade and other receivables;
• Investment in associates;
• Trade and other payables;
• Customer deposits;
• Lease liabilities;
• Borrowings;
• Derivative financial instruments.
Detailed analysis of these financial instruments is as follows:
Assets at amortised cost
Investment in associates (note 14)
Cash and cash equivalents (note 20)
Trade and other receivables (note 19)
Derivative assets held at fair value through the Income Statement
888 Africa convertible loan (note 25)
Designated cash flow hedging relationships
Derivative assets designated and effective as cash flow hedging instruments: (note 25):
— Cross-currency swaps
— Interest rate swaps
Total financial assets
Non-financial assets
Total assets
Liabilities held at fair value through the Income Statement
Ante post bets (note 25)
Liabilities at amortised cost
Borrowings (note 23)
Trade and other payables (note 21)
Customer deposits (note 21)
Lease liabilities (note 18)
Designated cash flow hedging relationships
Derivative assets designated and effective as cash flow hedging instruments: (note 25):
— Cross-currency swaps
— Interest rate swaps
Total financial liabilities
Non-financial liabilities
Total liabilities
Net assets
2023
£m
33.9
256.2
101.1
11.3
6.1
—
408.6
2,339.0
2,747.6
7.0
1,661.1
163.5
127.8
87.6
45.0
1.4
2,093.4
574.3
2,667.7
79.9
2022
£m
38.4
317.6
100.6
—
17.7
0.9
475.2
2,487.6
2,962.8
7.8
1,702.3
160.0
141.3
89.0
30.4
—
2,130.8
672.8
2,803.6
159.2
Capital management and financing risk
The Group seeks to maintain an appropriate capital structure which enables it to continue as a going concern, supports its business
strategy and takes into account the wider economic environment. The Group’s capital comprises equity and debt finance, and these
elements are managed to balance the requirements of the Group and the interests of debt providers. The Group manages its capital
structure through cash flows from operations, the raising or repayment of debt and the raising of equity capital from investors.
Financing risk is the risk that the Group is unable to access sufficient finance to refinance its debt obligations as they fall due. The Group
manages this risk by maintaining a balance between different funding sources including equity and debt. It seeks to mitigate its debt
financing risk by diversifying its sources of debt capital. The Board also seeks to mitigate the Group’s refinancing risk by having an
appropriately balanced debt maturity profile.
136
888 HOLDINGS PLC
24 FINANCIAL RISK MANAGEMENT CONTINUED
Credit risk
The Group is exposed to credit risk from counterparties defaulting on their obligations, resulting in financial loss to the Group. It arises in
relation to transactions with commercial counterparties and financial institutions. It also arises from customers who have been granted
access to credit facilities.
The Group manages its counterparty risk by closely monitoring and, where appropriate, limiting the amount that can be deposited or
accumulated with any one counterparty. The Group will only deposit funds with pre-approved financial institutions with specified minimum
credit ratings or strong balance sheet. The Group’s policy is to mitigate its credit risk with respect to derivative transactions by using a
number of different counterparties for material transactions.
Trade receivables
The Group’s credit risk on trade receivables arises mainly from balances held with the Group’s payment service providers (PSPs). These are
third-party companies that facilitate deposits and withdrawals of funds to and from customers’ virtual wallets with the Group. These are
mainly intermediaries that transact on behalf of debit card companies.
The risk is that a PSP would fail to discharge its obligation with regard to the balance owed to the Group. The Group reduces this credit risk
by:
• Monitoring balances with PSPs on a regular basis;
• Arranging for the shortest possible cash settlement intervals;
• Replacing rolling reserve requirements, where they exist, with a Letter of Credit by a reputable financial institution;
• Ensuring a new PSP is only contracted following various due diligence and 'Know Your Customer' procedures; and
• Ensuring policies are in place to reduce dependency on any specific PSP and to limit any concentration of risk.
The Group considers that based on the factors above and on extensive past experience, the PSP receivables are of good credit quality
and there is a low level of potential bad debt as at the year-end amounting to £0.4m arising from a PSP failing to discharge its obligation
(2022: £0.4m). This has been charged to the Consolidated Income Statement.
An additional credit risk the Group faces relates to customers disputing charges made to their credit cards ('chargebacks') or any other
funding method they have used in respect of the services provided by the Group. Customers may fail to fulfil their obligation to pay, which
will result in funds not being collected. These chargebacks and uncollected deposits, when occurring, will be deducted at source by the
PSPs from any amount due to the Group. As such the Group provides for these eventualities by way of an expected credit loss provision
based on analysis of past transactions. This provision is set off against trade receivables and at 31 December 2023 was £0.6m (2022:
£1.0m).
The Group’s in-house Fraud and Risk Management department carefully monitors deposits and withdrawals by following prevention and
verification procedures using internally-developed bespoke systems integrated with commercially-available third-party measures.
Cash and cash equivalents
Excess cash is centralised in accounts held by the Group’s Gibraltar headquartered holding and funding companies. Subsidiaries in its
other main locations maintain minimal cash balances as required for their operations. Cash settlement proceeds from PSPs, as described
above, are paid into bank accounts controlled by the Treasury function.
The Group holds the majority of its funds with highly reputable financial institutions and will not hold funds with financial institutions with a
low credit rating save for limited balances for specific operational needs. The Group maintains its cash reserves in highly liquid deposits
and regularly monitors interest rates in order to maximise yield.
Customer deposits
Customer deposits are matched by a corresponding liability and progressive prize pools of an equal value.
Restricted short-term deposits
Restricted short-term deposits are short-term deposits held by banks primarily to support guarantees in respect of regulated markets
licence requirements and office leases.
The Group’s maximum exposure to credit risk is the amount of financial assets presented above, totalling £408.6m (2022: £475.2m).
137
ANNUAL REPORT & ACCOUNTS 2023 STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SUPPLEMENTARY INFORMATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
For the year ended 31 December 2023
24 FINANCIAL RISK MANAGEMENT CONTINUED
Liquidity risk
Liquidity risk is the risk that the Group has insufficient funds available to settle its liabilities as they fall due. The Group generates strong
operating cash flows and aims to maintain sufficient cash balances to meet its anticipated working capital requirements based on regularly
updated cash flow forecasts. Liquidity requirements that cannot be met from operational cash flow or existing cash resources would be
satisfied by drawings under the Group’s Revolving Credit Facility and overdraft facility.
The following table details the contractual maturity analysis of the Group’s financial liabilities (undiscounted payments):
Trade and other payables
Customer deposits
Borrowings
Derivatives and embedded derivatives
Lease liabilities
Trade and other payables
Customer deposits
Borrowings
Derivatives and embedded derivatives
Lease liabilities
On
demand
£m
Less than
1 year
£m
—
127.8
—
7.0
—
134.8
163.5
—
130.6
14.7
29.7
338.5
On
demand
£m
Less than
1 year
£m
—
141.3
—
7.8
—
149.1
160.0
—
129.9
14.2
29.4
333.5
2023
1 to 5
years
£m
—
—
2,136.9
41.7
57.5
2,236.1
2022
1 to 5
years
£m
—
—
1,062.7
273.3
61.0
1,397.0
More
than
5 years
£m
—
—
—
—
10.5
10.5
More than
5 years
£m
—
—
1,319.5
—
8.7
Total
£m
163.5
127.8
2,267.5
63.4
97.7
2,719.9
Total
£m
160.0
141.3
2,512.1
295.3
99.1
1,328.2
3,207.8
Market risk
Currency risk
A substantial part of the Group’s customer deposits and revenues are held and generated in Pounds Sterling (GBP) and Euro (EUR) with
a smaller portion denominated in other currencies. Operating expenses are largely incurred in local currencies, primarily GBP, EUR, Israeli
New Shekel (ILS), US Dollar (USD), Canadian Dollar (CAD) and Romanian Leu (RON), with incremental exposure to operating expenses in
Swedish Krona and Polish Złoty (PLN). The Group has USD and EUR debt servicing costs with a significant proportion swapped to GBP
via cross-currency interest rate swaps, whereby approximately 49% of borrowings are effectively denominated in EUR, 43% denominated
in GBP and 8% denominated in USD. As a result of this, the Group is exposed to the impact of foreign currency fluctuations. The Group
mitigates its exposure to the impact of foreign exchange fluctuations on its cost base by adopting policies to hedge certain exposures.
During 2022, the Group entered into FX and cross-currency swaps in order to hedge its ongoing USD and EUR exposure under the Senior
Facilities Agreement and its ongoing EUR exposure under the Existing Notes and Additional Notes. However, there can be no assurance
that such hedging will eliminate the potentially material adverse effect of such fluctuations.
The Group’s financial risk arising from exchange rate fluctuations is mainly attributed to:
• Translation of EUR and USD denominated borrowings in the Group’s balance sheet.
• Mismatches between customer deposits, which are predominantly denominated in GBP, and the net receipts from customers, which are
settled in the currency of the customer’s choice.
• Mismatches between reported revenue, which is mainly generated in GBP (the Group’s reporting currency and the functional currency
of the majority of its subsidiaries), and a significant portion of deposits settled in local currencies.
• Expenses that are denominated in a currency other than the functional currency of the relevant entity.
The Group continually monitors the foreign currency risk and takes steps, where practical, to ensure that the net exposure is kept to an
acceptable level. This includes the potential use of foreign exchange forward contracts designed to fix the economic impact of known
exposures when considered appropriate.
138
888 HOLDINGS PLC
24 FINANCIAL RISK MANAGEMENT CONTINUED
Market risk continued
The tables below detail the monetary assets and liabilities by currency:
Cash and cash equivalents
Trade and other receivables
Derivatives and embedded derivatives
Monetary assets
Trade and other payables
Customer deposits
Borrowings
Derivatives and embedded derivatives
Lease liabilities — IFRS 16
Monetary liabilities
Net financial position
Cash and cash equivalents
Trade and other receivables
Derivatives and embedded derivatives
Monetary assets
Trade and other payables
Customer deposits
Borrowings
Derivatives and embedded derivatives
Lease liabilities — IFRS 16
Monetary liabilities
Net financial position
EUR
£m
84.2
53.5
4.4
142.1
(14.2)
(46.7)
(1,247.9)
(10.0)
(7.5)
(1,326.3)
(1,184.2)
EUR
£m
119.2
47.7
15.4
182.3
(70.2)
(43.0)
(1,271.1)
(10.5)
(7.5)
(1,402.3)
(1,220.0)
2023
USD
£m
29.1
12.8
1.1
43.0
(9.0)
(23.6)
(402.1)
(36.7)
(0.3)
(471.7)
(428.7)
2022
USD
£m
55.1
12.3
3.2
70.6
(43.1)
(50.5)
(420.7)
(21.0)
(0.5)
(535.8)
(465.2)
Other
£m
142.9
34.8
11.9
189.6
(140.3)
(57.5)
(11.1)
(6.7)
(79.8)
(295.4)
(105.8)
Other
£m
143.3
40.6
—
183.9
(46.7)
(47.8)
(10.5)
(6.7)
(81.0)
(192.7)
(8.8)
Total
£m
256.2
101.1
17.4
374.7
(163.5)
(127.8)
(1,661.1)
(53.4)
(87.6)
(2,093.4)
(1,718.7)
Total
£m
317.6
100.6
18.6
436.8
(160.0)
(141.3)
(1,702.3)
(38.2)
(89.0)
(2,130.8)
(1,694.0)
Sensitivity analysis
The table below details the effect on profit before tax of a 10% strengthening (and weakening) in the GBP exchange rate at the balance
sheet date for balance sheet items denominated in Euros:
10% strengthening
10% weakening
10% strengthening
10% weakening
2023
EUR
21.2
(21.2)
2022
EUR
28.9
(28.9)
139
ANNUAL REPORT & ACCOUNTS 2023
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SUPPLEMENTARY INFORMATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
For the year ended 31 December 2023
24 FINANCIAL RISK MANAGEMENT CONTINUED
Interest rate risk
The Group’s exposure to interest rate risk relates mostly to cash interest costs on unhedged borrowings where market rate increases lead
to both higher interest charges to the Group and less freely available cash, with some limited exposure to interest income on surplus funds
held. Changes in market interest rates also impact the fair value of the Group’s swaps portfolio.
The Group’s policy is to maintain a minimum of 50% of its debt at fixed interest rates in order to protect cash flow commitments against
rising interest rates while also maintaining flexibility to incur lower interest in a decreasing rates environment. As at 31 December 2023,
70% of the Group’s outstanding borrowings was at fixed rates (2022: 70%).
The Group’s current approach for surplus funds is to centralise and invest in interest bearing bank accounts held with its principal bankers
to maximise availability for working capital use.
The following table demonstrates the sensitivity to a reasonably possible change in interest rates on that portion of loans and borrowings
affected. With all other variables held constant, the Group’s profit before tax is affected through the impact on floating rate borrowings,
as follows:
Increase/(decrease) in profit
Increase/(decrease) in equity reserves
Increase/(decrease) in profit
Increase/(decrease) in equity reserves
2023
Increase of
100 basis
points
£m
Decrease of
100 basis
points
£m
5.5
5.5
(5.5)
(5.5)
2022
Increase of
100 basis
points
£m
Decrease of
100 basis
points
£m
(3.4)
(3.4)
3.4
3.4
Cross-currency swaps and interest rate swaps
The Group has executed a series of USD to GBP and EUR to GBP cross-currency interest rate swaps to provide increased certainty around
its interest cash flow commitments and better align the currency of interest costs to the currency of earnings.
As at 31 December 2023, the Group had cross-currency interest rate swaps with total principal of US$407.0m (2022: US$407.0m) and
€482.0m (2022: €482.0m) in place to hedge both currency and interest rate risk. In addition, at 31 December 2023, the Group had an
interest rate swap of €150.0m (2022: €150.0m) to hedge Euro interest rate risk.
25 FINANCIAL INSTRUMENTS
On acquisition, under IFRS 3 ‘Business Combinations’, the assets and liabilities of William Hill were recorded at fair value. Refer to note 16 for
details of values and valuation methods used.
The hierarchy (as defined in IFRS 13 ‘Fair Value Measurement’) of the Group’s financial instruments carried at fair value as at 31 December
2023 was as follows:
Financial assets
888 Africa convertible loan
Cross-currency swaps
Interest rate swaps
Financial liabilities
Cross-currency swaps
Interest rate swaps
Ante post bet liabilities
140
Contractual/
notional
amount
£m
6.8
385.9
130.1
522.8
351.9
—
—
351.9
Level 1
£m
Level 2
£m
Level 3
£m
—
—
—
—
—
—
—
—
—
6.1
—
6.1
45.0
1.4
—
46.4
11.3
—
—
11.3
—
—
7.0
7.0
888 HOLDINGS PLC
25 FINANCIAL INSTRUMENTS CONTINUED
The hierarchy (as defined in IFRS 13 ‘Fair Value Measurement’) of the Group’s financial instruments carried at fair value as at 31 December
2022 was as follows:
Financial assets
Cross-currency swaps
Interest rate swaps
Financial liabilities
Cross-currency swaps
Ante post bet liabilities
Contingent consideration (note 16)
Contractual/
notional
amount
£m
397.1
132.2
529.3
365.3
—
100.0
465.3
Level 1
£m
Level 2
£m
Level 3
£m
—
—
—
—
—
—
17.7
0.9
18.6
45.0
—
—
45.0
—
—
—
—
7.8
0.4
8.2
Ante post bets
Ante post bets are a liability arising from an open position at the period end date in accordance with the Group’s accounting policy for
derivative financial instruments. Ante post bets at the period end totalled £7.0m (2022: £7.8m) and are classified as current liabilities.
Ante post bet liabilities are valued using methods and inputs that are not based upon observable market data and all fair value
movements are recognised in revenue in the Income Statement. Although the final value will be determined by future betting outcomes,
there are no reasonably possible changes to assumptions or inputs that would lead to material changes in the fair value determined. The
principal assumptions relate to the Group’s historical gross win margins by betting markets and segments. Although these margins vary
across markets and segments, they are expected to stay broadly consistent over time, only varying in the short term. The gross win margins
are reviewed annually at period end. As at 31 December 2023, the gross win margins ranged from 2%-25%.
A reconciliation of movements in the ante post bets liability in the year is provided below.
At 31 December 2022
Movement through Income Statement
At 31 December 2023
Ante post
bet liabilities
£m
7.8
(0.8)
7.0
888 Africa convertible loan
On 22 March 2022 the Group entered into a joint venture agreement as 19.9% owners of 888 Africa Limited ('888 Africa').
Whilst the Group’s equity contribution was not material, as part of the joint venture shareholder agreement, the Group agreed to lend 888
Africa $8.0m (£7.2m) as a senior secured convertible loan that can be converted into 60.1% of 888 Africa issued and outstanding shares
at the Group’s discretion. Because of the conversion option, the loan is deemed to be a derivative financial asset under IFRS 9 ‘Financial
Instruments’ and is held at fair value through profit and loss.
As at 31 December 2023 the convertible loan has been fair valued using the market approach based on forecast 2024 revenue in proven
African markets. The non-cash, fair value uplift of £4.1m is recorded within operating profit in the Consolidated Income Statement. In the
prior year fair value was deemed approximate to the carrying value of the convertible loan due to the early stage of the investment.
141
ANNUAL REPORT & ACCOUNTS 2023
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SUPPLEMENTARY INFORMATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
For the year ended 31 December 2023
25 FINANCIAL INSTRUMENTS CONTINUED
Hedging activities
The table below illustrates the effects of hedge accounting on the Consolidated Statement of Financial Position and Consolidated Income
Statement by disclosing separately by risk category each type of hedge and the details of the associated hedging instrument and hedge
item. These are for items designated as in a cash flow hedging relationship.
31 December 2023
Change in
fair value
in period for
calculating
ineffectiveness
(hedging
instrument)
£m
Cash
settlements
and accruals
in the period
(hedging
instrument)
£m
Change in
fair value
in period for
calculating
ineffectiveness
(hedged item)
£m
Cash
settlements
and accruals
in the period
(hedged item)
£m
Hedge
ineffectiveness
in the period
£m
(1.7)
(1.7)
(9.8)
(17.0)
(26.8)
0.3
0.3
(9.1)
(2.0)
(11.1)
(1.7)
(1.7)
(9.8)
(17.0)
(26.8)
0.3
0.3
(9.1)
(2.0)
(11.1)
—
—
—
—
—
31 December 2022
Change in fair
value in period
for calculating
ineffectiveness
(hedging
instrument)
£m
Cash
settlements
and accruals
in the period
(hedging
instrument)
£m
Change in fair
value in period
for calculating
ineffectiveness
(hedged item)
£m
Cash
settlements
and accruals
in the period
(hedged item)
£m
Hedge
ineffectiveness
in the period
£m
1.0
1.0
5.1
(17.8)
(12.7)
—
—
(1.4)
(2.3)
(3.7)
0.9
0.9
4.7
(18.7)
(14.0)
(0.1)
(0.1)
(0.4)
(0.9)
(1.3)
(1.4)
(2.3)
(3.7)
Carrying
amount
£m
(0.8)
(0.8)
(4.7)
(34.8)
(39.5)
Carrying
amount
£m
1.0
1.0
5.1
(17.8)
(12.7)
Interest rate swaps
EUR trades
Total
Cross-currency swaps
EUR trades
USD trades
Total
Interest rate swaps
EUR trades
Total
Cross-currency swaps
EUR trades
USD trades
Total
Contractual maturity analysis
The tables below analyse the Group’s financial liabilities into relevant maturity groupings based on their contractual maturities for net and
gross settled derivative financial instruments.
The amounts disclosed in the table are the contractual undiscounted cash flows:
31 December 2023
On
demand
£m
—
—
—
—
Less than
1 year
£m
0.8
(8.2)
(6.6)
(14.0)
1 to 5
years
£m
(1.5)
(7.7)
(30.7)
(39.9)
More than
5 years
£m
—
—
—
—
Total
£m
(0.7)
(15.9)
(37.3)
(53.9)
Interest rate swaps
Cross-currency swaps
EUR trades
USD trades
Total
142
888 HOLDINGS PLC
25 FINANCIAL INSTRUMENTS CONTINUED
Contractual maturity analysis continued
31 December 2022
Interest rate swaps
Cross-currency swaps
EUR trades
USD trades
Total
26 DEFERRED TAX
31 December 2022
On
demand
£m
Less than
1 year
£m
—
—
—
—
—
(6.2)
(8.0)
(14.2)
1 to 5
years
£m
—
316.9
(43.6)
273.3
More than
5 years
£m
—
—
—
—
Total
£m
—
310.7
(51.6)
259.1
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for income tax purposes. The Group’s deferred tax assets and liabilities resulting from
temporary differences, some of which are expected to be settled on a net basis, are as follows:
Fixed asset temporary differences
Intangible assets
Other temporary differences
Restricted interest
Tax losses
Total
As at
1 January
2023
£m
(1.1)
(231.2)
3.1
14.4
4.0
(210.8)
Prior year
adjustments
£m
Transfers
£m
Disposals
£m
Credit/
(charge)
to income
£m
Arising on
business
combinations
£m
As at
31 December
2023
£m
4.6
(2.9)
(2.2)
—
(0.8)
(1.3)
—
(9.0)
9.0
—
—
—
—
3.6
0.7
—
—
4.3
3.5
58.0
0.9
3.1
2.1
67.6
—
—
20.3
—
—
20.3
7.0
(181.5)
31.8
17.5
5.3
(119.9)
As at
1 January
2022
£m
Acquisition of
William Hill
£m
Prior year
adjustments
£m
Exchange
differences
£m
Credit/
(charge)
to income
£m
Exceptional
credit/
(charge) to
income
£m
Exceptional
credit/
(charge) to
OCI
£m
As at
31 December
2022
£m
Fixed asset temporary
differences
Intangible assets
Other temporary differences
Restricted interest
Tax credits
Tax losses
Total
1.6
(2.7)
1.4
—
—
—
0.3
0.6
(252.2)
8.1
11.6
—
0.1
(231.8)
3.0
1.9
(0.8)
13.1
0.4
—
17.6
0.3
0.7
(0.1)
—
(0.2)
—
0.7
(6.6)
12.7
(4.9)
(10.3)
(0.2)
3.9
(5.4)
—
8.4
—
—
—
—
8.4
Reflected in the Statement of Financial Position as follows:
Deferred tax assets
Deferred tax liabilities
—
—
(0.6)
—
—
—
(0.6)
2023
£m
37.0
(156.9)
(1.1)
(231.2)
3.1
14.4
—
4.0
(210.8)
2022
£m
5.2
(216.0)
143
ANNUAL REPORT & ACCOUNTS 2023 STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SUPPLEMENTARY INFORMATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
For the year ended 31 December 2023
26 DEFERRED TAX CONTINUED
Restatement
Since the disclosure of the provisional fair values for the acquisition of William Hill on 1 July 2022, an adjustment of £15.7m has been made to
increase the fair value of provisions, with a related £4.4m reduction in deferred tax liabilities, and an equivalent movement in goodwill. This
adjustment has been made after the 31 December 2022 year end accounts and during the measurement period. See note 16 for further
details.
Arising on business combinations
In the current year, but outside of the measurement period, management has identified £20.3m of additional deferred tax balances which
were present at acquisition. Management has deemed the adjustment to be qualitatively immaterial for restatement of prior year figures,
as it does not impact the profit or loss, net assets, cash flow, remuneration, the Group’s key performance indicators or any of the Group’s
covenants. As such, the deferred tax balances have been adjusted in the current year, with a corresponding adjustment to the acquisition
goodwill.
Deferred tax assets on unamortised tax allowances on intangible assets in Ireland
As at 31 December 2023 the Group has recognised a deferred tax asset of £32.9m (2022: £2.7m) in relation to unused tax allowances of
£236.5m (2022: £263.4m) in the Group’s wholly owned Irish subsidiary.
The Directors have concluded that there is convincing evidence that the Irish subsidiary will continue to generate taxable profits in the
future, against which taxable allowances can be fully utilised. The allowances initially arose from the transfer of intellectual property rights
from 888 Group companies to the Group’s Irish subsidiary in 2022.
As part of the Group restructuring programme, a Board decision was taken in 2023 to confirm the retention of corporate activity in Ireland,
which was previously uncertain. The recovery of the deferred tax asset in Ireland is supported by the receipt of recurring revenue streams
from royalty payments paid from other Group companies.
The Directors have reviewed the latest forecast for the Group member companies in their operating markets, including their ability to
continue to generate revenues and therefore pay royalty fees into the future. This includes consideration of the commercial plans under the
Group’s control, the future corporate structure of the Group and current licensing activity.
The Directors believe there is convincing evidence that the deferred tax asset will unwind over a period of 29 years and as such have fully
recognised the deferred tax asset as at 31 December 2023. If forecast royalty revenues paid to the Group’s Irish subsidiary are 10% lower
than forecasted, the recovery of the deferred tax asset would be extended to 38 years.
Tax rates
The enacted future rate of UK corporation tax of 25.0% (2022: 25%), the Gibraltar statutory income tax rate of 12.5% (2022: 12.5%), the
Maltese effective tax rate of 35.0% (2022: 35%) and the Irish effective tax rate of 12.5% (2022: 12.5%) have been used to calculate the
amount of deferred tax.
Tax losses
The Group has recognised £37.0m (2022: £5.2m) of deferred tax assets, including £7.3m (2022: £4.0m) in respect of unutilised tax losses
which are available in companies which are anticipated to make future profits. The losses mainly relate to the UK and are expected to be
utilised in the foreseeable future. All losses and tax credits, recognised and unrecognised, may be carried forward indefinitely.
Management have based their assessment of the recognition of deferred tax assets on unused tax losses of £46.3m (2022: £63.8m) at the
period end on the forecast also used for the impairment review.
Restricted interest
Restricted interest represents a deferred tax asset of £17.5m (2022: £14.4m) in relation to interest restrictions for which an asset has been
recognised to the extent that sufficient taxable temporary differences exist at the balance sheet date.
Pillar Two income taxes
The Group has applied the exception to recognising and disclosing information about deferred tax assets and liabilities arising from the
implementation of Pillar Two income taxes, as required under IAS 12.
Unrecognised deferred tax attributes
Deferred tax is not recognised in respect of the value of the Group’s investments in subsidiaries and interests in joint ventures where we are
able to control the timing of the reversal of the temporary differences and it is probable that such differences will not reverse in the future.
The amount of such temporary differences for which deferred tax has not been recognised was £110.5m (and tax thereon of £2.5m) (2022:
£17.2m (and tax thereon £1.5m)).
The Group has unutilised tax losses of £38.9m (31 December 2022: £63.8m) in entities which are not anticipated to make profits in the
foreseeable future and for which no deferred tax has been recognised. The Group has carried forward restricted interest in the UK of
£112.5m (2022: £nil) for which no deferred tax asset has been recognised.
144
888 HOLDINGS PLC 27 SHARE CAPITAL
Share capital comprises the following:
Ordinary Shares of £0.005 each
1,026,387,5001
1,026,387,500
5.1
5.1
1. Including 297,501 treasury shares held by the Group as at 31 December 2023 (2022: 447,020).
Authorised
31 December
2023
Number
31 December
2022
Number
31 December
2023
£m
31 December
2022
£m
Ordinary Shares of £0.005 each at beginning of year
Issue of Ordinary Shares of £0.005 each
Ordinary Shares of £0.005 each at end of year
Allotted, called up and fully paid
31 December
2023
Number
446,331,656
2,713,601
31 December
2022
Number
372,759,202
73,572,454
449,045,257
446,331,656
31 December
2023
£m
31 December
2022
£m
2.2
—
2.2
1.9
0.3
2.2
The narrative below includes details on issue of Ordinary Shares of £0.005 each as part of the Group’s employee share option plan during
2023 and 2022.
On 7 April 2022 the Company issued 70.8m new ordinary shares to partly fund the acquisition of the international (non-US) business of
William Hill, representing approximately 19% of its issued capital, at £2.30 per share. After issue costs of £4.3m, the net proceeds were
£158.5m. Issue costs directly attributable to the transaction were accounted for as a deduction from share premium in the prior period.
28 SHARE BASED PAYMENTS
Equity-settled share benefit charges
As of 31 December 2023, the Group has equity-settled employee shares and share options granted under three equity-settled employee
share incentive plans. The 888 Long-Term Incentive Plan 2015, which was adopted at the Extraordinary General Meeting on 29 September
2015, is open to all employees (including Executive Directors) and full-time consultants of the Group, at the discretion of the Remuneration
Committee. Awards under this scheme will vest in instalments over a fixed period of at least three years subject to the relevant individuals
remaining in service. Certain of these awards are subject to additional performance conditions imposed by the Remuneration Committee
at the dates of grant, further details of which are given in the Directors’ Remuneration Report.
The second is the 888 Holdings Plc Long-Term Incentive Plan 2023, which was adopted by shareholders at the Annual General Meeting
on 23 May 2023. As a result of this no further awards have been granted under the 888 Long-Term Incentive Plan 2015. The 888 Holdings
Plc Long-Term Incentive Plan 2023 is also open to all employees (including Executive Directors), with awards vesting over a period to be
determined by the Remuneration Committee at the time of grant. Awards may or may not be subject to additional performance conditions
imposed by the Remuneration Committee.
In addition, on 8 May 2017, the Board adopted a Deferred Share Bonus Plan (DSBP) in order to allow the Company to comply with the
deferral requirement previously contained in its Directors' Remuneration Policy. As a result of the deferral requirement set out in the
new Directors' Remuneration Policy no further awards have been granted under the DSBP. Further details are set out in the Directors'
Remuneration Report.
In 2023 the Group awarded options under the 888 Holdings Plc SAYE Option Plan, which was adopted by shareholders at the Annual
General Meeting on 15 June 2022; and the 888 Holdings Plc 2023 International SAYE Option Plan established pursuant to the authority of the
Directors of the Company conferred by shareholders at the same Annual General Meeting.
Details of equity-settled shares as part of the AEP, the LTIP and the DSBP are set out below:
Ordinary Shares granted (without performance conditions)
Outstanding future vesting equity awards at the beginning of the year
Future vesting equity awards granted during the year
Future vesting equity awards lapsed during the year
Shares issued upon vesting during the year
Outstanding future vesting equity awards at the end of the year
Averaged remaining life until vesting
The outstanding future vesting equity awards at the end of the year are set out below:
2023
Number
6,553,595
562,177
(2,119,657)
(2,713,601)
2,282,514
1.25 years
2022
Number
5,446,420
3,269,343
(821,961)
(1,340,207)
6,553,595
1.27 years
145
ANNUAL REPORT & ACCOUNTS 2023
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SUPPLEMENTARY INFORMATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
For the year ended 31 December 2023
28 SHARE BASED PAYMENTS CONTINUED
Equity-settled share benefit charges continued
Deferred Share Bonus Plan
Outstanding future vesting equity awards at the beginning of the year
Future vesting equity awards granted during the year
Future vesting equity awards lapsed during the year
Shares exercised during the year
Outstanding future vesting equity awards at the end of the year
Averaged remaining life until vesting
2023
Number
310,268
—
(122,691)
(149,519)
2022
Number
307,422
220,225
—
(217,379)
38,058
0.67 years
310,268
0.81 years
Ordinary Shares granted for future vesting are valued at the share price at grant date, which the Group considers approximates to the fair
value. The Group recognised the following as treasury shares as of 31 December 2023:
(i)
11 March 2022, the Group purchased 356,977 shares on the open market at an average price of 193.0¢ per share;
(ii) 22 March 2021, the Group purchased 220,225 shares on the open market at an average price of 362.0¢ per share; and
(iii) 29 April 2020, the Group purchased 130,796 shares on the open market at an average price of 143.7¢ per share.
Ordinary shares granted (subject to performance conditions)
Outstanding at the beginning of the year
Shares granted during the year
Lapsed future vesting shares
Shares issued upon vesting during the year
Outstanding at the end of the year
Averaged remaining life until vesting
2023
Number
2,435,321
5,056,071
(3,056,648)
—
4,434,744
2.16 years
2022
Number
3,208,384
1,006,013
(353,333)
(1,425,743)
2,435,321
1.28 years
The Group granted 3,651,071 shares on 17 April 2023 and 1,405,000 shares on 9 May 2023 (2022: 1,006,013). The share prices at the grant
date were 74.8¢ and 78.4¢ respectively. Shares outstanding at the end of the year consist of 4,434,744 shares subject to 50% EPS growth
target, and 50% total shareholder return (TSR).
Further details of performance conditions that have to be satisfied on these awards are set out in the Directors’ Remuneration Report. The
EPS growth target is taken into account when determining the number of shares expected to vest at each reporting date, and the TSR
target is taken into account when calculating the fair value of the share grant.
Valuation information — shares granted under TSR condition:
Shares granted during the year:
Share pricing model used
Determined fair value
Number of shares granted
Average risk-free interest rate
Average standard deviation
Average standard deviation of peer group
Valuation information — shares granted
Weighted average share price at grant date
Weighted average share price at issue of shares
2023
2022
Monte Carlo Monte Carlo
£0.41
£1.15
5,056,071
503,007
3.68%
49.4%
42.5%
0.1%
46.0%
53.0%
2023
2022
Without
performance
conditions
With
performance
conditions
Without
performance
conditions
With
performance
conditions
£0.92
£0.75
£0.75
£0.84
£1.55
£2.08
£1.87
£1.95
Ordinary shares granted for future vesting with EPS growth performance conditions are valued at the share price at grant date, which the
Group considers approximates to the fair value. The restrictions on the shares during the vesting period, primarily relating to non-receipt of
dividends are considered to have an immaterial effect on the share option charge.
In accordance with IFRS 2 a charge to the Consolidated Income Statement in respect of any shares or options granted under the above
schemes is recognised and spread over the vesting period of the shares or options based on the fair value of the shares or options at the
grant date, adjusted for changes in vesting conditions at each balance sheet date. These charges have no cash impact.
146
888 HOLDINGS PLC
28 SHARE BASED PAYMENTS CONTINUED
Share benefit charges
Equity-settled (credit)/charge for the year
Cash-settled charge for the year
Total share benefit (credit)/charge
2023
£m
(0.5)
—
(0.5)
2022
£m
7.9
(2.7)
5.2
29 RETIREMENT BENEFIT SCHEMES
William Hill pension schemes
In the prior year, the Group acquired a number of defined contribution and defined benefit pension schemes, operated by William Hill. The
UK schemes are operated under a single trust and the assets of all the schemes are held separately from those of the Group in funds
under the control of trustees.
The respective costs of these schemes are as follows:
Defined contribution schemes charged to operating profit
Defined benefit scheme charged to operating profit
2023
£m
8.8
2.8
2022
£m
4.3
1.3
Defined contribution schemes
The defined contribution schemes, to which both the Group and employees contribute to fund the benefits, are available for all eligible
employees. The only obligation of the Group with respect to these schemes is to make the specified contributions.
The total cost charged to income in respect of these schemes represents contributions payable to the schemes by the Group at rates
specified in the rules of the respective schemes. At 31 December 2023, contributions of £nil (31 December 2022: £nil) due in respect of the
current reporting period were outstanding to be paid over to the schemes.
Defined benefit scheme
The Group also operates a defined benefit scheme in the UK for eligible employees which closed to new members in 2002. Under the
scheme, employees are entitled to retirement benefits varying between 1.67% and 3.33% of final pensionable pay for each year of service
on attainment of a retirement age of 63. With effect from 1 April 2011, the defined benefit scheme was closed to future accrual but maintains
the link for benefits accrued up to 31 March 2011 with future salary increases (up to a maximum of 5% per annum). Employed members of
this scheme were automatically transferred into one of the defined contribution schemes. The costs of administering the scheme are borne
by the Group.
For the purposes of preparing the information disclosed in these accounts, a full actuarial valuation of the scheme was carried out at
30 September 2019 and updated to 31 December 2023 by a qualified independent actuary. The present values of the defined benefit
obligation and the related current service cost were measured using the projected unit credit method and by rolling forward the results
of the 30 September 2019 technical provisions using actuarial techniques, allowing for cash flows and interest over the period, differences
between the assumptions used to set the technical provisions and those selected for accounting under IAS 19.
Pension buy-in
During 2021, prior to the acquisition by the Group of William Hill, William Hill agreed a buy-in of the scheme’s liabilities. On 28 June 2021,
a transaction was completed which insured the liabilities of the scheme with Rothesay Life. As a result of the transaction, the scheme
holds annuities with Rothesay Life which are qualifying insurance policies as defined in IAS 19.8 ‘Employee Benefits’. The income from these
policies exactly matches the amount and timing of benefits to those members covered under the policies. As with other bulk annuity
purchases the scheme has carried out, the change was treated as a change in investment strategy.
At the year-end date, the estimated Defined Benefit Obligation (DBO) for all insured members was £255.3m. The value of the buy-in policies
was determined to be £255.4m, as the effects of GMP equalisation were not included in the contract value of the buy-in insurance policy.
Funding valuation
The general principles adopted by the Trustees for the purposes of this funding valuation are that the assumptions used, taken as a whole,
will be sufficiently prudent for pensions already in payment to continue to be paid and to reflect the commitments which will arise from
members’ accrued pension rights. The William Hill Group agreed to pay £1.9m per annum in respect of the costs of insured death benefits,
expenses and levies until September 2025.
147
ANNUAL REPORT & ACCOUNTS 2023
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SUPPLEMENTARY INFORMATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
For the year ended 31 December 2023
29 RETIREMENT BENEFIT SCHEMES CONTINUED
William Hill pension schemes continued
Disclosure of principal assumptions
The financial assumptions used by the actuary in determining the present value of the defined benefit scheme’s liabilities were:
Rate of increase of pensions (non-pensioner)
Rate of increase of pensions (pensioner)
Discount rate
Rate of RPI inflation (non-pensioner)
Rate of RPI inflation (pensioner)
Rate of CPI inflation
2023
%
2.8
3.1
4.5
3.0
3.3
2.5
2022
%
3.0
3.3
4.7
3.1
3.4
2.5
In accordance with the relevant accounting standard, the discount rate has been determined by reference to market yields at the period
end date on high-quality fixed income investments at a term consistent with the expected duration of the liabilities. Price inflation is
determined by the difference between the yields on fixed and index-linked Government bonds with an adjustment to allow for differences in
the demand for these bonds, which can distort this figure. The expected rate of salary growth and pension increases are set with reference
to the expected rate of inflation. No change has been made to the basis of inflation applied to pension increases in the scheme.
The mortality assumption is kept under review and has been updated. The current life expectancies for a member underlying the value of
the accrued liabilities are:
2023
Years
21.4
23.0
23.5
25.3
2023
£m
255.4
(255.3)
(0.1)
—
2022
Years
21.9
23.6
23.9
25.8
2022
£m
254.2
(255.4)
—
(1.2)
Year to
31 December
2023
£m
1 July to
31 December
2022
£m
1.0
1.8
2.8
0.4
0.9
1.3
Life expectancy at age 65
Male retiring now
Male retiring in 25 years’ time
Female retiring now
Female retiring in 25 years’ time
The assets in the scheme are set out in the table below.
Total market value of assets
Present value of scheme liabilities
Effect of asset ceiling
Asset/(deficit) in scheme at end of year
Analysis of the amount charged to operating profit/(loss):
Current service cost
Administration expenses
Total operating charge
148
888 HOLDINGS PLC
29 RETIREMENT BENEFIT SCHEMES CONTINUED
William Hill pension schemes continued
Disclosure of principal assumptions continued
Analysis of the amounts recognised in the Consolidated Statement of Comprehensive Income:
Actual return less expected return on pension scheme assets
Actuarial gain on demographic assumptions
Actuarial loss on experience adjustment
Actuarial loss/(gain) arising from changes in financial assumptions
Actuarial remeasurements
Change in the impact of asset ceiling
(Income)/loss recognised as other comprehensive income
Movements in the present value of defined benefit obligations in the period were as follows:
Opening defined benefit obligation
Current service cost
Interest cost
Actuarial loss/(gain) on financial assumptions
Actuarial gain on demographic assumptions
Actuarial loss on experience adjustment
Benefits paid
Insurance premium for risk benefits
At end of year
Movements in the present value of fair value of scheme assets in the period were as follows:
Opening defined benefit obligation
Interest income on plan assets
Return on plan assets (excluding interest income)
Company contributions
Administration expenses charged to operating (loss)/profit
Benefits paid
Insurance premium for risk benefits
At end of year
2023
£m
(5.2)
(5.0)
5.9
2.4
(1.9)
0.1
(1.8)
2023
£m
255.4
1.0
11.7
2.4
(5.0)
5.9
(15.1)
(1.0)
255.3
2023
£m
254.2
11.7
5.2
1.9
(1.8)
(14.8)
(1.0)
255.4
2022
£m
36.2
(0.8)
3.0
(38.1)
0.3
—
0.3
2022
£m
293.1
0.4
5.3
(38.1)
(0.8)
3.0
(7.1)
(0.4)
255.4
2022
£m
292.7
5.3
(36.2)
0.8
(0.9)
(7.1)
(0.4)
254.2
Sensitivity analysis of the principal assumptions used to measure scheme liabilities
As the scheme is now fully bought-in, any changes in the value of the scheme’s liabilities due to changes in the underlying assumptions
will be matched by changes in the value of the scheme’s assets (which are measured in line with the obligations). There would therefore be
a nil net balance sheet impact from any changes in the principal assumptions.
Nature and extent of the risks arising from financial instruments held by the defined benefit scheme
Through the scheme, following the buy-in, the main risk that the Group has is counterparty risk, with the insurance company backing the
majority of the policies with the exception of GMP equalisation which is not included in the contract value of the buy-in insurance policy but
is considered immaterial.
149
ANNUAL REPORT & ACCOUNTS 2023
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SUPPLEMENTARY INFORMATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
For the year ended 31 December 2023
29 RETIREMENT BENEFIT SCHEMES CONTINUED
William Hill pension schemes continued
Funding
Alongside the risk assessment above, on 30 September 2020, the Group agreed an ongoing funding requirement with the Trustees which
expires on 30 September 2025.
The weighted average duration of the scheme’s defined benefit obligation as at 31 December 2023 is 15 years (31 December 2022: 15
years).
The undiscounted maturity profile of the defined benefit obligation between one and ten years is shown below:
Less than one year
Between one and two years
Between two and five years
Between five and ten years
2023
£m
13.6
14.0
47.5
75.3
2022
£m
12.7
13.4
45.7
71.7
No allowance is made for commutation lump sums or individual transfers out due to the fluctuating nature of these payments.
30 RELATED PARTY TRANSACTIONS
Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation and are not
disclosed in this note. Transactions between the Group and its associate are disclosed below.
Trading transactions
Associates and joint ventures
As part of the William Hill acquisition in the prior year, the Group acquired Sports Information Services (Holdings) Limited, an associate of
the William Hill Group. For the year to 31 December 2023, the Group made purchases of £36.6m (1 July 2022 to 31 December 2022: £15.8m)
from Sports Information Services Limited, a subsidiary of Sports Information Services (Holdings) Limited. At 31 December 2023, the amount
payable to Sports Information Services Limited by the Group was £nil (31 December 2022: £nil).
During the year the Group made loans totalling £2.4m (2022: £4.5m) to 888 Africa as part of the joint venture shareholder agreement.
These loans incur interest at 12% per annum. For the year ended 31 December 2023 the Group received £0.7m in revenue from 888 Africa
for the use of the 888 brand. During the year the Group also made loans totalling £1.8m to 888 Emerging Limited, a joint venture of the
Group.
Remuneration of key management personnel
The aggregate amounts payable to key management personnel, as well as their share benefit charges, are set out below:
Short-term benefits
Post-employment benefits
Share benefit charges — equity-settled
2023
£m
1.6
0.3
0.1
2.0
2022
£m
2.9
0.1
2.4
5.4
Further details on Directors’ remuneration are given in the Directors’ Remuneration Report.
31 CONTINGENT ASSETS AND LIABILITIES
Legal claims
As at 31 December 2023, potential legal claims of £4.5m related to the Austria and Germany provisions (see note 22 for further details) are
deemed to give rise to a possible future cash outflow, as such no provision was required at the balance sheet date.
The calculation of the customer claims liability includes provision for both legal fees and interest but does not include any gaming taxes
that have already been paid on these revenues. Management have assessed that it is probable as opposed to virtually certain that the tax
will be reclaimed and therefore a contingent asset of up to £28.0m (2022: £24.3m) has been disclosed for the tax reclaims. Refer to note 22
for further details.
32 EVENTS AFTER THE REPORTING DATE
On 6 March 2024, the Group announced its decision to conclude its partnership with Authentic Brands Group as part of the strategic review
of its B2C business. This partnership had granted exclusive use of the Sports Illustrated brand for online betting and gaming. As part of the
termination agreement, the Group has agreed to pay a total termination fee of $50.0m, $25.0m of which will be paid upfront in cash from
available resources. The remaining $25.0m will be paid between 2027 and 2029.
On 22 March 2024, the GB Gambling Commission (GBGC) informed the Group that it had concluded its review into the Group’s operating
licences that was announced by the Group on 14 July 2023. The GBGC concluded the review without imposing any licence conditions,
financial penalties or other remedies on the Group.
150
888 HOLDINGS PLC 33 RELATED UNDERTAKINGS
The consolidated financial statements include the following principal subsidiaries of 888 Holdings Plc:
NAME
888 (Ireland) Limited
888 Acquisitions Limited
888 Acquisitions LLC
888 Atlantic Limited
888 Cayman Finance Limited
888 UK Interactive Holdings Limited
888 CZ Limited
888 Denmark Limited
888 France Limited
888 Germany Limited
888 Italia Ltd
888 Liberty Ltd
888 Netherlands Limited
888 Online Games España, S.A.
888 Portugal Ltd
888 Romania Limited
888 Sweden Limited
888 UK Limited
888 US Holdings Inc.
888 US Inc.
888 US Ltd
888 US Services Inc.
888 VHL UK Holdings Limited
A.J.Schofield Limited (in liquidation)
AAPN Holdings LLC
AAPN New Jersey LLC
Ad-Gency Limited (in liquidation)
Admar Services (Gibraltar) Limited
COUNTRY
Malta
Gibraltar
Delaware
Gibraltar
Cayman Islands
United Kingdom
Gibraltar
Malta
Malta
Malta
Malta
Gibraltar
Malta
Ceuta
Malta
Malta
Malta
Gibraltar
Delaware
Delaware
Gibraltar
Delaware
United Kingdom
United Kingdom
Delaware
New Jersey
Israel
Gibraltar
Admar Services (Malta) Limited
Malta
Alfabet S.A.S. (sold in year)
Arena Racing Limited
B.B.O’Connor (Lottery) Limited
B.J.O’Connor Holdings Limited
B.J.O’Connor Limited
Baseflame Limited (in liquidation)
Bradlow Limited
Brigend Limited
Brooke Bookmakers Limited
Camec (Scotland) Limited
Camec (Southern) Limited
(in liquidation)
Camec Limited
Cassava Enterprises (Gibraltar) Ltd
Cassava Holdings Limited
Cellpoint Investments Limited
City Tote Limited (in liquidation)
Concession Bookmakers Limited (in
liquidation)
Dansk Underholdning Limited
Deluxe Online Limited (in liquidation)
Deviceguide Limited
Dixie Operations Limited
Colombia
United Kingdom
Jersey
Jersey
Jersey
United Kingdom
United Kingdom
Gibraltar
United Kingdom
United Kingdom
United Kingdom
United Kingdom
Gibraltar
Antigua &
Barbuda
Cyprus
United Kingdom
United Kingdom
Malta
United Kingdom
United Kingdom
Antigua &
Barbuda
PERCENTAGE
OF EQUITY
INTEREST
NATURE OF BUSINESS
Holds Irish online betting licence
100%
Acquisition vehicle for the William Hill purchase
100%
Dormant company
100%
Holds an online supplier licence in Michigan
100%
Holding company
98.6%
Holding company
100%
Dormant company
100%
Holds Danish online gaming licence
100%
Dormant company
100%
Holds German online gaming licences
100%
Holds Italian online gaming licence
100%
Holds Delaware CSIE licence
100%
Netherlands licence application entity, currently dormant
100%
Holds Spanish online gaming licence
100%
Holds Portuguese online gaming licence
100%
Holds Romanian online gaming licence
100%
Holds Swedish online gaming licence
100%
Holds UK&I Online gaming licence
100%
Holding company
100%
Holding company
100%
100%
Holds Nevada IGSP licence
100% Employs New Jersey based personnel and hold servers/IT
equipment in the US.
Holding company
In liquidation
Holding company
Dormant company
In liquidation
100% Provide provision of marketing services to other companies
within the Group.
Provides the provision of marketing services to other
companies within the Group
Colombian operations
Dormant company
Dormant company
Property investment and management
Holds Class 1 bookmakers licence in Jersey.
In liquidation
Dormant company
Dormant company
Dormant company
Dormant company
In liquidation
90%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Dormant company
100%
Dormant company
100%
100% Dormant company, previously held lease of Antigua offices
100%
100%
100%
100%
Dormant company
In liquidation
In liquidation
Dormant company
In liquidation
Dormant company
Dormant company
151
ANNUAL REPORT & ACCOUNTS 2023 STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SUPPLEMENTARY INFORMATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
For the year ended 31 December 2023
33 RELATED UNDERTAKINGS CONTINUED
NAME
Entertainment Ventures Europe 2019
Limited
Evenmedia Limited (In liquidation)
Evoke Gaming Ltd
Fordart Limited
Fred Parkinson Management Limited
Gaming Ventures Europe 2019 Limited
Gisland Limited
Goodfigure Limited (in liquidation)
Grand Parade Limited
Grand Parade Sp. z o.o.
Green Gaming Group PLC
GUS Carter (Cash) Limited
GUS Carter Limited
Ivy Lodge Limited
James Lane (Bookmaker) Limited
James Lane (Turf Accountants) Limited
James Lane Group Limited
Laystall Limited
Live 5 Holdings Limited
Live 5 Limited
Matsbest Limited
Matsgood Limited
Mr Green & CO AB
Mr Green & Co Optionsbarare AB
Mr Green Consultancy Services Ltd.
Mr Green Consulting AB
Mr Green Limited
MRG IP Limited
MRG Spain PLC
New Wave Virtual Ventures
Nimverge Tech India Private Limited
Online Entertainment Limited
Phonethread Limited
Random Logic Limited
Random Logic Ventures Limited
Regency Bookmakers (Midlands) Limited
Selwyn Demmy (Racing) Limited
SIA Mr Green Latvia (sold in year)
COUNTRY
Malta
United Kingdom
Malta
Gibraltar
United Kingdom
Malta
Gibraltar
United Kingdom
United Kingdom
Poland
Malta
United Kingdom
United Kingdom
Guernsey
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
Sweden
Sweden
United Kingdom
Sweden
Malta
Malta
Malta
Gibraltar
India
Gibraltar
United Kingdom
Israel
Israel
United Kingdom
United Kingdom
Latvia
Sparkware Technologies SRL
Spectate Limited
Romania
Ireland
St James Place Limited
T H Jennings (Harlow Pools) Limited
Trackcycle Limited
VDSL (International) Limited
Guernsey
United Kingdom
United Kingdom
Gibraltar
VHL America, LLC
VHL Colorado, LLC
VHL Financing (Malta) Limited
VHL Financing Limited
VHL Indiana, LLC
VHL Iowa, LLC
Delaware
Colorado
Malta
Gibraltar
Indianapolis
Iowa
152
PERCENTAGE
OF EQUITY
INTEREST
100%
NATURE OF BUSINESS
Dormant company
100%
100%
100%
100%
100%
In liquidation
100%
Operates remote gaming licences
100% Enters into B2B contracts pursuant to Gibraltar licence and
general commercial business activities
Dormant company
Dormant company
Payment transmission services
In liquidation
Contract software development
Software writing and maintenance and project
management
Holding company
Dormant company
Dormant company
Property holding company
Dormant company
Dormant company
Dormant company
Dormant company
Holding company
Games studio. Licensed and regulated entity
by the GB Gambling Commission
Dormant company
Dormant company
Dormant company
Dormant company
Dormant company
Dormant company
Holds online gaming licence
Holds certain IP for the Group
Holds a licence in Spain
Holds mobile gaming applications
Dormant company – assets sold in year
Held domains, presently dormant
Dormant company
Research, development and marketing service company
Holding company
Dormant company
Dormant company
Gaming entity regulated by the Latvian regulator and
servicing the Latvian (Mr Green) market
Software development
Research & development centre in Ireland and holds
Romania and Michigan gaming licences
Property holding company.
Dormant company
Dormant company
Operator of the gaming sites pursuant to Virtual Global
Digital Services Limited’s Gibraltar licence for Canadian
customers
Holding company for US B2C
Holds Colorado online gaming licence
Dormant company
Holding company
Dormant company
Dormant company
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
95%
100%
100%
100%
100%
100%
888 HOLDINGS PLC 33 RELATED UNDERTAKINGS CONTINUED
NAME
VHL Louisiana, LLC
VHL Maryland, LLC
VHL Massachusetts LLC
VHL Michigan, LLC
VHL Missouri, LLC
VHL New Jersey
VHL Ohio, LLC
VHL Ontario Limited
VHL Virginia, LLC
Vickers Bookmakers Limited (in
liquidation)
Virtual Digital Services Limited
Virtual Emerging Entertainment Limited
Virtual Global Digital Services Limited
Virtual Internet Services Latam S.L.U.
(Dissolved in year)
Virtual Internet Services Limited
Virtual IP Assets Limited
Virtual Marketing Services
(Gibraltar) Limited
Virtual Marketing Services
(Ireland) Limited
Virtual Marketing Services (UK) Limited
Virtual Share Services Limited
Vynplex Limited (In liquidation)
WHG (International) Limited
COUNTRY
Louisiana
Maryland
Massachusetts
Michigan
Missouri
New Jersey
Ohio
Gibraltar
Virginia
United Kingdom
Malta
Gibraltar
Gibraltar
Ceuta
Gibraltar
Antigua &
Barbuda
Gibraltar
Ireland
England & Wales
Gibraltar
United Kingdom
Gibraltar
WHG (Malta) Limited
Malta
WHG Customer Services Philippines, INC
WHG IP Licensing Limited
WHG ITALIA SrL
Philippines
Gibraltar
Italy
WHG Online Marketing Spain S.A.
WHG Services (Bulgaria) Limited EOOD
WHG Services (Philippines) Limited
WHG Services Limited
Spain
Bulgaria
Gibraltar
United Kingdom
Malta
WHG Spain PLC
Gibraltar
WHG Trading Limited
United Kingdom
Will Hill Limited
United Kingdom
William Hill (Alba) Limited
William Hill (Caledonian) Limited
United Kingdom
William Hill (Course) Limited (in liquidation) United Kingdom
United Kingdom
William Hill (Edgeware Road) Limited
United Kingdom
William Hill (Effects) Limited
United Kingdom
William Hill (Essex) Limited
United Kingdom
William Hill (Football) Limited
United Kingdom
William Hill (Goods) Limited
Isle of Man
William Hill (IOM) No. 3 Limited
United Kingdom
William Hill (London) Limited
Malta
William Hill (Malta) Limited
PERCENTAGE
OF EQUITY
INTEREST
100%
90%
100%
100%
100%
100%
100%
100%
90%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
NATURE OF BUSINESS
Dormant company
Provides lottery services and holds a gaming licence in
Maryland
Dormant company
Holds online gaming and sports wagering licences in
Michigan
Dormant company
Holds New Jersey online gaming licence
Dormant company
Holds Ontario online gaming licence
Holds Virginia online gaming licence
In liquidation
Holds gaming licence
Licensing of brands for emerging markets
Holds Gibraltar gaming licence
Dormant company
Procurement of internet and bandwidth services for the
Group, holds Gibraltar office lease and employs Gibraltar
personnel
IP company
Group marketing acquisition company
Marketing and other services company
Marketing and other services company
Holding of shares to satisfy vesting of equity awards
In liquidation
Holds gaming licence and operates UK sports betting
activity
Dormant and non-trading company. Denmark licence
applicant
Operating entity of Philippines shared service centre
Dormant company
Payroll-related expenses of employees in Italy
100%
100%
100%
100%
100%
Trading entity that receives income
via intercompany recharge
100% Provision of marketing services to other Group companies
The provision of consulting and technical support
100%
100%
Dormant company
Providing technical development services for online
100%
business
Operates a Spanish remote gaming licence.
Dormant company
Holding company
Dormant company
Dormant company
In liquidation
Dormant company
Dormant company
Dormant company
Dormant company
Dormant company
Dormant company
Dormant company
Dormant company
100%
100%
100%
100%
100%
100%
100%
100%
153
ANNUAL REPORT & ACCOUNTS 2023 STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SUPPLEMENTARY INFORMATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
For the year ended 31 December 2023
33 RELATED UNDERTAKINGS CONTINUED
NAME
William Hill (Midlands) Limited
William Hill (North Eastern) Limited
William Hill (North Western) Limited
William Hill (Northern) Limited
(in liquidation)
William Hill (Products) Limited (in
liquidation)
William Hill (Resources) Limited
William Hill (Scotland) Limited
William Hill (Southern) Limited
William Hill (Strathclyde) Limited (in
liquidation)
William Hill (Supplies) Limited (in
liquidation)
William Hill (Wares) Limited
William Hill (Western) Limited
William Hill Bookmakers (Ireland) Limited
William Hill Call Centre Limited
William Hill Cayman Holdings Limited
William Hill Credit Limited
William Hill Employee Shares Trustee
Limited
William Hill Finance Limited
William Hill Gametek AB
William Hill Global PLC
William Hill Holdings Limited
William Hill Investments Limited
William Hill Latvia SIA (sold in year)
William Hill Limited
William Hill Malta PLC
William Hill Offshore Limited
William Hill Organization Limited
William Hill Steeplechase Limited
William Hill Trustee Limited
Willstan Properties Limited
Willstan Racing (Ireland) Limited
Willstan Racing Holdings Limited
Willstan Racing Limited
Windsors (Sporting Investments) Limited
Wise Entertainment DK ApS
Wizard’s Hat Limited
COUNTRY
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
Ireland
Ireland
Cayman Islands
United Kingdom
United Kingdom
United Kingdom
Sweden
Malta
United Kingdom
United Kingdom
Latvia
United Kingdom
Malta
Ireland
United Kingdom
Gibraltar
United Kingdom
United Kingdom
Ireland
United Kingdom
United Kingdom
United Kingdom
Denmark
Malta
PERCENTAGE
OF EQUITY
INTEREST
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
NATURE OF BUSINESS
Dormant company
Dormant company
Dormant company
In liquidation
In liquidation
Dormant company
Dormant company
Dormant company
In liquidation
In liquidation
Dormant company
Dormant company
Dormant company
Dormant company
Holding company
Dormant company
Dormant company
Holding company
100%
Provides technical and support services
100%
Holds sports and gaming licence in Malta
100%
Holding company
100%
Holding company
100%
Main licence holder in Latvia.
90%
Previously listed WH Group operating company
100%
Holds gaming licence for Malta, Italy and Ireland
100%
100%
Dormant company
100% Operation of Licensed Betting Offices (LBOs), and main UK
employing entity
Dormant company
100%
100%
Acting as Trustee to the William Hill Pension Scheme
100% Property investment and management in Northern Ireland
Dormant company
100%
Dormant company
100%
Dormant company
100%
Dormant company
100%
100%
In liquidation
Dormant company
100%
154
888 HOLDINGS PLC APPENDIX 1 — ALTERNATIVE PERFORMANCE MEASURES
In reporting financial information, the Board uses various alternative performance measures (APMs) which it believes provide useful
additional information for understanding the financial performance and financial health of the Group. These APMs should be considered
in addition to IFRS measures and are not intended to be a substitute for them. Since IFRS does not define APMs, they may not be directly
comparable to similar measures used by other companies.
The Board uses APMs to improve the comparability of information between reporting periods by adjusting for non-recurring or
uncontrollable factors which affect IFRS measures, to aid users in understanding the Group’s performance.
Consequently, the Board and management use APMs for performance analysis, planning, reporting and incentive-setting.
APM
CLOSEST EQUIVALENT
IFRS MEASURE
ADJUSTED EBITDA
Operating profit/loss
ADJUSTED EBITDA
MARGIN
No direct equivalent
DEFINITION/PURPOSE
RECONCILIATION/CALCULATION
A reconciliation of this measure is
provided on the face of the Consolidated
Income Statement.
See note A.
Adjusted EBITDA is defined as operating
profit or loss excluding share benefit
charges, foreign exchange, depreciation
and amortisation, fair value gains and
any exceptional items which are typically
non-recurring in nature.
Adjusted EBITDA margin is defined as
adjusted EBITDA divided by revenue. It is
a measure of the business’s profitability,
and also measures how much revenue
the business converts into underlying
profitability. Improving adjusted EBITDA
margin is a key strategic priority for the
business.
ADJUSTED EPS
Earnings per share
Adjusted EPS represents basic and
diluted EPS based on adjusted profit
before tax.
Reconciliations of these measures are
provided in note 10 of the financial
statements.
ADJUSTED PROFIT
AFTER TAX
Profit after tax
Adjusted profit after tax is defined as
profit after tax before amortisation of
acquired intangibles and finance fees,
foreign exchange, share benefit charges,
exceptional items and tax on exceptional
items.
A reconciliation of this measure is
disclosed in note 10 of the financial
statements.
EXCEPTIONAL
AND ADJUSTED
ITEMS
No direct equivalent
Exceptional items are those items the
Directors consider to be one-off or
material in nature that should be brought
to the reader’s attention in understanding
the Group’s financial performance.
Exceptional items and adjusted items are
included on the face of the Consolidated
Income Statement with further detail
provided in note 3 of the financial
statements.
Adjusted items are recurring items that
are excluded from internal measures
of underlying performance, and which
are not considered by the Directors
to be exceptional. This relates to the
amortisation of specific intangible
assets recognised in acquisitions, foreign
exchange and share benefit charges.
This measure is the tax charge for the
year expressed as a percentage of profit
before tax.
Effective tax rate is disclosed in note 9 of
the financial statements.
EFFECTIVE TAX
RATE
Income tax expense
155
ANNUAL REPORT & ACCOUNTS 2023 STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SUPPLEMENTARY INFORMATION
APPENDIX 1 — ALTERNATIVE PERFORMANCE MEASURES CONTINUED
DEFINITION/PURPOSE
RECONCILIATION/CALCULATION
Adjusted effective tax rate is disclosed in
note 9 of the financial statements.
See note B.
Reconciled on page 25 of Annual Report.
This measure is the tax charge for the
year as a percentage of profit before
tax adjusted for the items disclosed in
adjusted profit after tax above.
Leverage ratio is calculated as net
debt divided by the previous 12-months
adjusted pro forma EBITDA. Net debt
comprises the principal outstanding
balance of borrowings, accrued
interest on those borrowings and lease
liabilities less cash and cash equivalents
(excluding customer deposits).
Pro forma metrics, which are unaudited,
reflect the results as if 888 had owned
William Hill for each of the periods and
excludes the results of the 888 Bingo
business for all periods. This enables
measurement of the performance of the
divisions on a comparable year-on-year
basis.
Retail
£m
UK&I Online
£m
International
£m
Other
£m
Corporate
£m
535.0
98.9
18.5%
255.5
41.2
16.1%
658.5
152.3
23.1%
455.5
61.6
13.5%
517.4
99.4
19.2%
508.3
118.3
23.3%
—
—
—
19.5
1.7
8.7%
—
(42.3)
N/A
—
(4.9)
N/A
2023
£m
(1,661.1)
(96.6)
(1,757.7)
(87.6)
128.4
(1,716.9)
308.3
5.6
Total
£m
1,710.9
308.3
18.0%
1,238.8
217.9
17.6%
2022
£m
(1,702.3)
(112.7)
(1,815.0)
(89.0)
176.3
(1,727.7)
310.6
5.6
CLOSEST EQUIVALENT
IFRS MEASURE
No direct equivalent
APM
ADJUSTED
EFFECTIVE TAX
RATE
LEVERAGE RATIO
No direct equivalent
No direct equivalent
PRO FORMA
REVENUE AND
PRO FORMA
ADJUSTED EBITDA
NOTE A
2023
External revenue from continuing businesses
Adjusted EBITDA
Adjusted EBITDA margin %
2022
External revenue from continuing businesses
Adjusted EBITDA
Adjusted EBITDA margin %
NOTE B
Borrowings
Add back loan transaction fees
Gross borrowings
Lease liability
Cash (excluding customer balances)
Net debt
Adjusted EBITDA
Financial leverage ratio
156
888 HOLDINGS PLC
COMPANY BALANCE SHEET
At 31 December 2023
Assets
Non-current assets
Investments in subsidiaries
Loan to subsidiaries
Amounts due from related parties
Current assets
Trade and other receivables
Corporate tax assets
Amounts due from related parties
Total assets
Equity and liabilities
Equity
Share capital
Share premium
Treasury shares
Retained earnings1
Total equity
Liabilities
Current liabilities
Trade and other payables
Income tax payable
Loan payable to subsidiaries
Amounts due to related parties
Non-current liabilities
Loan payable to subsidiaries
Total liabilities
Total equity and liabilities
Note
2
3
4
4
4
5
8
8
2023
£m
39.6
170.9
—
210.5
16.3
0.7
130.2
147.2
357.7
2.2
160.7
(0.6)
86.5
248.8
5.8
—
20.2
82.8
108.9
—
—
108.9
357.7
2022
£m
48.8
163.9
112.9
325.6
18.0
—
—
18.0
343.6
2.2
160.7
(0.9)
90.6
252.6
2.3
0.5
—
67.8
70.6
20.4
20.4
91.0
343.6
1. Includes net loss of the Company for the year ended 31 December 2023 of £3.3m (31 December 2022: £2.7m).
The financial statements on pages 157 to 159 were approved and authorised for issue by the Board of Directors on 26 March 2024 and were
signed on its behalf by:
PER WIDERSTRÖM
Chief Executive Officer
SEAN WILKINS
Chief Financial Officer
The notes on pages 160 to 162 form part of these financial statements.
157
ANNUAL REPORT & ACCOUNTS 2023
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SUPPLEMENTARY INFORMATION
COMPANY STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2023
Balance at 1 January 2022
Loss for the year
Issue of shares
Acquisition of treasury shares
Exercise of deferred share bonus plan
Equity-settled share benefit charges (note 8)
Balance at 31 December 2022
Loss for the year
Vesting on deferred share bonus plan
Equity-settled share benefit credits (note 8)
Balance at 31 December 2023
Share
capital
£m
Share
premium
£m
Treasury
shares
£m
Retained
earnings
£m
1.9
—
0.3
—
—
—
2.2
—
—
—
2.2
2.5
—
158.2
—
—
—
160.7
—
—
—
160.7
(0.9)
—
—
(0.7)
0.7
—
(0.9)
—
0.3
—
(0.6)
85.4
(0.9)
—
—
(0.7)
6.8
90.6
(3.3)
(0.3)
(0.5)
86.5
Total
£m
88.9
(0.9)
158.5
(0.7)
—
6.8
252.6
(3.3)
—
(0.5)
248.8
The following describes the nature and purpose of each reserve within equity.
Share capital — represents the nominal value of shares allotted, called-up and fully paid for.
Share premium — represents the amount subscribed for share capital in excess of nominal value.
Treasury shares — represent reacquired own equity instruments. Treasury shares are recognised at cost and deducted from equity.
Retained earnings — represents the cumulative net gains and losses recognised in the parent company Statement of Comprehensive
Income and other transactions with equity holders
The notes on pages 160 to 162 form part of these financial statements
158
888 HOLDINGS PLC COMPANY STATEMENT OF CASH FLOWS
For the year ended 31 December 2023
Cash flows from operating activities:
Loss before tax
Adjustments for:
Interest on loans to subsidiaries
Interest on loans from subsidiaries
Impairment of investment
Cash used in operating activities before working capital movement
Movements in working capital
Increase in amounts owed by subsidiaries
Increase in amounts owed to subsidiaries
Decrease/(increase) in other receivables
Increase/(decrease) in trade and other payables
Net cash (used in)/generated from operating activities
Cash flows from investing activities
Loan to subsidiaries
Dividends received
Net cash generated from investing activities
Cash flows from financing activities:
Issue of shares
Acquisition of treasury shares
Repayment of loans to subsidiaries
Dividends paid
Net cash generated from financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
The notes on pages 160 to 162 form part of these financial statements.
Note
3, 5
3
5
8
4
4
8
2023
£m
(4.5)
(7.0)
(0.3)
8.6
(3.2)
(9.1)
—
1.0
4.1
(7.2)
—
(8.0)
(8.0)
—
—
—
15.2
15.2
—
—
—
2022
£m
(2.0)
(5.4)
—
—
(7.4)
(34.5)
67.8
(10.5)
(2.7)
20.1
(163.9)
—
(163.9)
158.5
(0.7)
(6.6)
—
151.2
—
—
—
159
ANNUAL REPORT & ACCOUNTS 2023 STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SUPPLEMENTARY INFORMATION
NOTES TO THE COMPANY FINANCIAL STATEMENTS
For the year ended 31 December 2023
1 GENERAL INFORMATION AND ACCOUNTING POLICIES
A description of the Company, its activities and definitions are included in note 1 to the consolidated financial statements.
The Company’s financial statements have been prepared in accordance with UK adopted international accounting standards in
accordance with the requirements of the Gibraltar Companies Act 2014. The Company has taken advantage of the exemption to not
prepare an income statement. The financial statements have been prepared on a historical cost basis, except where certain assets or
liabilities are held at amortised cost or at fair value as described in the Company’s accounting policies.
All values are rounded to the closest hundred thousand, except when otherwise indicated.
The significant accounting policies applied in the financial statements in the prior year have been applied consistently in these financial
statements, except for the amendments to accounting standards effective for the annual periods beginning on 1 January 2023 and
representation of expenses analysis in the income statement. These are described in more detail in note 1 to the consolidated financial
statements.
Investment in subsidiaries
The Company’s investments in subsidiaries are carried at cost less provisions resulting from impairment.
Share-based payments
The financial effect of awards by the Company of options over its equity shares to employees of subsidiary undertakings is recognised by
the Company in its individual financial statements as an adjustment to its investment in subsidiaries with an opposite adjustment to equity.
The subsidiary, in turn, will recognise the IFRS 2 adjustment in its income statement with a credit (debit) to equity to reflect the deemed
capital contribution from (dividend to) the Company.
Key accounting estimates – impairment testing of investments in and amounts due from subsidiaries
The Company’s investments in and amounts due from subsidiaries have been tested for impairment by comparison against the value in use
for those entities. The key assumptions used in the model are consistent with those disclosed for the Group.
2 INVESTMENTS IN SUBSIDIARIES
The Company’s principal subsidiaries are listed in note 33 to the consolidated financial statements. In the Company’s financial statements,
investments in subsidiaries are held at cost less provision for any impairment. The Group applies IFRS 2 'Share-based Payment'.
Consequently, the Company recognises as a cost of investment the value of its own shares that it makes available for the purpose of
granting share options to employees or contractors of its subsidiaries. The net movement in investment in subsidiaries during the year was
£9.2m (2022: £8.1m). Included within this were share-based payment charges of £0.5m in 2023 (2022: £3.3m), which is net of £nil intragroup
recharges related to share-based payment schemes (2022: £nil) as well as an impairment of the investment of 888 US Inc of £8.7m. The
Company made no capital contributions during the year (2022: £nil) in respect of incorporation of new subsidiaries.
160
888 HOLDINGS PLC 3 TRADE AND OTHER RECEIVABLES
Other receivables and prepayments
Restricted short-term deposits
2023
£m
0.9
15.4
16.3
2022
£m
1.9
16.1
18.0
The carrying value of trade and other receivables approximates to their fair value. An expected credit loss assessment for material
balances has been performed. None of the balances included within trade and other receivables are past due and no material expected
credit loss provision is required in either year.
4 SHARE CAPITAL
The disclosures in note 27 to the consolidated financial statements are consistent with those for the Company, including capital
management in note 24 to the consolidated financial statements.
5 TRADE AND OTHER PAYABLES
Trade payables
Other payables and accrued expenses
2023
£m
—
5.8
5.8
2022
£m
0.1
2.2
2.3
The carrying value of trade and other payables approximates to their fair value. All balances included within trade and other payables are
repayable on demand.
6 FINANCIAL RISK MANAGEMENT
To the extent relevant to the Company’s financial assets and liabilities (see notes 3 and 5), the Company’s financial risk management
objectives and policies are consistent with those of the Group as disclosed in note 24 to the consolidated financial statements.
Interest-bearing loans and borrowings are disclosed in note 23 to the consolidated financial statements.
7 SHARE BENEFIT CHARGES
The disclosures in note 28 to the consolidated financial statements are consistent with those for the Company except that the charge for
the year is partly taken to investment in subsidiaries, as set out in note 2.
161
ANNUAL REPORT & ACCOUNTS 2023
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SUPPLEMENTARY INFORMATION
NOTES TO THE COMPANY FINANCIAL STATEMENTS CONTINUED
For the year ended 31 December 2023
8 RELATED PARTY TRANSACTIONS
The aggregate amounts payable to key management personnel, considered to be the Directors of the Company, as well as their share
benefit charges are detailed in note 30 to the consolidated financial statements.
During the year, the Company did not pay dividends to its shareholders (2022: £nil) (see note 11 to the consolidated financial statements).
During the year, the Company did not receive any dividends from its subsidiaries (2022: £nil).
During the year, share benefit credits in respect of options and shares of the Company awarded to employees of subsidiaries totalled £1.5m
(2022: charges of £6.8m). During the year, the Company did not charge its subsidiaries for the cost of awards (2022: £nil).
During the year, the Company has not repaid its subsidiaries (2022: £6.2m) and recorded £0.8m (2022: £0.8m) interest expenses in respect
of the loan which were recharged to other Group entities.
At 31 December 2023, the amounts owed by subsidiaries to the Company were £301.1m (2022: £276.8m).
The Company has a loan receivable with its subsidiary, Gisland Limited. The balance of this loan at 31 December 2023 is £170.9m
(31 December 2022: £163.9m). This loan accrues interest at a rate of 4.4% which the Company recognises as interest income. This loan
is not repayable on demand and has no fixed date of settlement; it is therefore classified as a non-current asset.
The Company has a loan payable to its subsidiary, Random Logic Limited. The balance of this loan at 31 December 2023 is £20.2m
(31 December 2022: £20.4m). This loan accrues interest at a rate of 4.4% which the Company recognises as interest expense. This loan
is classified as a current liability given it falls due in March 2024.
9 DEFERRED TAXES
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for income tax purposes. Following a change in the Company’s tax residence to the
United Kingdom, deferred tax is recognised at the UK tax rate. As at 31 December 2023, the Company has a deferred tax liability of £nil
(2022: £nil) partially offset by a deferred tax asset of £nil (2022: £nil).
162
888 HOLDINGS PLC TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES (TCFD) REPORT
This report provides our climate-related disclosures in line with the TCFD’s
recommendations. A summary of the climate-related financial disclosures has been
integrated into the ESG section of the Annual Report on page 20. We continue to invest
in our approach to climate reporting and will continue to evolve our processes and
disclosures over time.
GOVERNANCE
We have an established system of ESG governance agreed with the Board, which is embedded throughout the business proportionate
to the nature, scale, and complexity of our operations.
BOARD OVERSIGHT OF CLIMATE-RELATED RISKS AND OPPORTUNITIES
The Board provides oversight of our climate-related risks and opportunities supported by the executive committees and management.
Board oversight of climate-related risks and opportunities.
ESG GOVERNANCE
BOARD OF DIRECTORS
The Board is accountable for all climate-related risks and opportunities impacting the Group and for
the net zero targets set. In October 2023, Anne De Kerckhove was appointed to be the Chair of the
ESG Committee. An ESG update is a standing agenda item at every Board meeting. In 2023, the Board
considered the overall ESG strategy, the global safer gambling strategy and received training around
problem gambling and gambling disorder. The Board receives updates on climate issues from the ESG
Committee of the Board via the Chair, supported by the Chief Strategy Officer and Chief Risk Officer.
ESG COMMITTEE
OF THE BOARD
In 2023, the ESG Committee of the Board continued to evolve and now comprises the Chair, Anne de
Kerckhove, alongside Non-Executive Directors, Mark Summerfield and Ori Shaked.
The ESG Committee of the Board has oversight of all ESG matters including strategy; targets and key
performance indicators; budgets; capex; and setting performance objectives. Materiality is the threshold
at which ESG issues become sufficiently important to 888’s investors and other stakeholders that they
should be publicly reported and includes anything that is materially different from expectations and
requires a significant change in strategy or creates a material change in financial results or position. The
threshold of materiality for ESG issues is continually assessed by the ESG Committee of the Board as
stakeholders’ needs evolve over time.
The Chief Risk Officer, who leads the Risk and Sustainability Committee, and the Chief Strategy
Officer provide updates to the ESG Committee of the Board at every Board meeting. In 2023, the ESG
Committee of the Board met at least three times to discuss Safer Gambling strategy, net zero strategy,
community engagement and charity support. Safer gambling strategy and plans were presented to the
ESG Committee of the Board in July 2023. Climate-related plans were also considered as the business
works to define a detailed transition plan, consistent data across the enlarged Group and potentially
agree a science-basted target.
163
ANNUAL REPORT & ACCOUNTS 2023 STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SUPPLEMENTARY INFORMATION
TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES (TCFD) REPORT CONTINUED
WHO OWNS OUR RELATED RISKS AND OPPORTUNITIES?
Our executive team is responsible for managing climate-related risks and opportunities on a day-to-day basis. Our ESG governance
structure looks like this:
Our ESG governance organogram
BOARD CHAIRMAN AND CHAIR OF THE ESG COMMITTEE OF THE BOARD
ESG COMMITTEE OF THE BOARD
RISK AND SUSTAINABILITY COMMITTEE
CHIEF RISK OFFICER
ESG FORUM (ESG DIRECTOR)
COMPANY SECRETARY
Chief Procurement Officer
Chief People Officer
Corporate Affairs
Safer Gambling Teams
EXTERNAL RISK CONSULTANTS
Chief Strategy Officer
KEY
ESG TEAM
BUSINESS FUNCTIONS
WHO DOES WHAT ACROSS OUR ESG GOVERNANCE STRUCTURE?
Advise, escalate, report
Group governance
Delegates
ESG governance
Oversight and challenge
Business functions
Information sharing
External advisors
ESG GOVERNANCE
RISK AND
SUSTAINABILITY
COMMITTEE
ESG FORUM
THE GROUP’S
FUNCTIONS
164
The Risk and Sustainability Committee is a monthly executive management committee, which provides
oversight to support the ESG Committee of the Board in managing risks to our long-term strategic
objectives. The committee will monitor the Group’s performance against the Board’s risk appetite, review
the effectiveness of the risk management framework and ensure risk management decisions are aligned
to long-term goals (see the terms of reference available on 888’s corporate website). The Risk and
Sustainability Committee is chaired by the Chief Risk Officer, who owns the Group Risk Register. The Chief
Risk Officer reports to the ESG Committee of the Board at regular intervals.
The ESG and Sustainability Director leads the ESG Forum, a cross-functional forum which implements the
Group’s ESG strategy, including representatives from Procurement, Strategy, People, Corporate Affairs and
Compliance. The ESG Forum serves as a medium through which ESG issues (including climate) can be
managed and escalated to the Risk and Sustainability Committee by the ESG and Sustainability Director.
From its formation, the ESG Forum met monthly to discuss ESG issues, progress against targets
and updates on current and planned initiatives. The environmental data is tracked internally using
a dashboard (Normative) to assess progress against climate goals. In 2023 work was started to
amalgamate data sources with Normative selected as the preferred partner to host the Group’s data.
Our Procurement team, led by the Chief Procurement Officer, has ownership of all environmental issues.
Specifically, Procurement owns Scope 1, 2 and 3 GHG emissions and works to develop the strategies for
driving-down total GHG emissions across the business in partnership with the ESG and Sustainability
Director and the wider business. Procurement lead on our encompassing best practice in monitoring and
ultimately driving down emissions both in the Group and the supply chain.
888 HOLDINGS PLC
FUTURE PRIORITIES
In 2024, we will continue to evolve our climate strategy across the business:
• the ESG Committee of the Board receiving more regular updates from management on climate;
• continue to evolve the transition plan to net zero across scope 1, 2 and 3 off the back of completing the data re-baselining exercise
• build on previous good work around our UK retail estate to reduce energy usage
• explore renewable energy provision across our international offices
• examine potential efficiencies across our technology stack, particularly around data server usage
• engage with our suppliers to work to establish their transition plans and reduce our scope 3 emissions
STRATEGY
As part of our ESG strategy, Players, People and Planet, we have put the fight against climate change at the heart of our plan. We are
committed to transitioning our business model to one that aligns with a 1.5°C world and a net zero carbon economy and have developed a
transition plan that we continue to build on. Our strategic response focuses on the associated transition and physical climate-related risks
and opportunities which are material to our business.
OUR TRANSITION PLAN
We recognise that our business, like all businesses, needs to evolve and we are committed to contributing to the global economy’s transition
to a low carbon reality. Building on previous work, we set ambitious targets of being net zero by 2030 (Scope 1 and 2 emissions) and
across our value chain by 2035 (Scope 3 emissions). These targets are integrated into the strategy, with four priority actions covering
our operations and the wider value chain. We believe that early action to drive aggressive reductions in emissions will lead to a more
competitive business overall. We want to drive ambitious change and proactively manage our climate-related risks, and we therefore
committed to meeting net zero by 2035, which is 15 years earlier than the UK government’s mandated goal to be net zero by 2050.
In our previous Zero Carbon Report published last year we updated on our progress along the pathway to reach net zero emissions. It
also outlines the development of a transition plan aligned to our business model with a world in which the global average temperature
is allowed to rise by no more than 1.5°C above pre-industrial levels. We acknowledge that in 2022 the UK Transition Plan Taskforce (TPT)
developed a sector neutral framework for transition plan disclosures. We may in future years consider aligning our disclosures with the
TPT’s guidance for transition plans in future iterations of its plan. We achieved our main goal in 2023 of completing our re-baselining
exercise across the legacy William Hill and 888 businesses. This saw us move to use the data platform, Normative, advancing our climate
data and understanding as a result. In 2024 we may review our climate goals and transition plan as we now better understand our total
carbon footprint across our entire value chain. As part of our re-baselining work some of our previously declared emissions changed due to
methodological differences; we will discuss this in more detail later in the report.
We are ambitious in our desire to accelerate the transition to a carbon-free economy. We remain committed to accelerating this work and
our targets are:
• Carbon neutral across across scope 1 and 2 emissions by 2030.
• Fully net zero across all our value chain, including scope 3 by 2035.
Having completed our re-baselining work in 2023, all reporting in subsequent years will utilise 2023 as the baseline for reporting.
CLIMATE-RELATED SCENARIO ANALYSIS
In 2022, the Group conducted qualitative scenario analysis for the first time to inform its climate strategy and risk management, and
climate has been included in the Group Risk Register for the first time for monitoring by the Board. In 2024 we will explore reviewing and
updating the scenario analysis, consider double materiality and examine other ESG risks that may be cause for concern for the business.
CLIMATE-RELATED RISKS AND OPPORTUNITIES IDENTIFIED OVER THE SHORT, MEDIUM AND LONG TERM
Due to the inherent uncertainty and pervasive nature of the risks associated with climate change, the Group modelled multiple time
horizons and performed scenario analysis under three climate scenarios to assess its exposure to physical and transition risks up to 2100.
The following expected timescales for impact were selected:
SHORT-, MEDIUM- & LONG-TERM TIME HORIZONS
2023
2025
2026
2037
2100
Short-term
Medium-term
Long-term
These time horizons were chosen with the understanding that climate-related issues tend to manifest over the long term but medium- and
short-term implications may also be seen.
165
ANNUAL REPORT & ACCOUNTS 2023 STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SUPPLEMENTARY INFORMATION
TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES (TCFD) REPORT CONTINUED
CLIMATE SCENARIOS
In the exercise, management chose to model three climate scenarios (including a 2°C or lower scenario as recommended by the TCFD) to
ensure that a range of different climate transition pathways was represented.
Climate-related scenarios used in the scenario analysis and sources
h
g
H
i
s
k
s
i
r
l
a
n
o
i
t
i
s
n
a
r
T
w
o
L
Early action
(1.5 — 2.0°C)
Limited action
(2.0 — 3.0°C)
No action
(3.0 — 4.0°C)
Low
Physical risks
High
Graph showing climate scenarios and transitional and physical impacts.
Below is a high level overview of the key features of each warming scenario.
EARLY ACTION
(1.5°C - 2.0°C)
OVERVIEW
• SSP1-2.6.
• Net-zero emissions
expected from 2050
onwards.
• Warming stays well
below 2°C by 2100,
with the aim of
staying within the
1.5°C threshold.
PHYSICAL ASPECTS
TRANSITIONAL ASPECTS
• Increase in the intensity and frequency
• Implement policy changes to limit
of extreme weather events.
warming to below 1.5°C.
• Manageable changes across most
regions.
• Shifts in agriculture practices may be
observed.
• Rapid decarbonisation of infrastructure
and technology is implemented in high
emitting sectors.
• Common use of fossil fuels is ruled out
with extremely limited use by 2040.
• SSP2-4.5
• Further increased intensity and
• Some new climate policies expected to
LIMITED
ACTION
(2.0°C - 3.0°C)
• Emissions expected
to peak by 2050
but do not reach net
zero by 2100.
frequency of extreme weather events.
be implemented.
• In some global regions conditions are
• Limited decarbonisation in high
unmanageable under extreme physical
conditions.
emitting sectors.
• Governmental policies not consistently
aligned to mitigating climate change.
• Warming is
• Considerable ecological impacts
estimated to be
around 2.7°C by
2100.
• Aligns with the more
ambitious pledges
made under the
Paris agreement.
expected.
• Shifts in agriculture practices observed.
• Low lying regions become vulnerable to
sea-level rise.
166
888 HOLDINGS PLC
NO ACTION
(3.0°C - 4.0°C)
OVERVIEW
• SSP3-7.0.
• Emissions continue
to rise and are
expected to double
by 2100.
• Warming is
estimated to be
around 3.6°C by
2100.
PHYSICAL ASPECTS
TRANSITIONAL ASPECTS
• Prolonged, extreme weather conditions.
• Very few climate policies are introduced.
• Areas uninhabitable.
• Large ecological destruction.
• Climate feedback effects enforce
rapid physical changes and produce
high uncertainty around magnitude of
impacts from feedback.
• Emissions are reduced gradually
through efficiencies only.
• Reasonable reliance globally on fossil
fuels.
CLIMATE-RELATED RISKS AND OPPORTUNITIES IDENTIFIED AND RISK MANAGEMENT
A comprehensive list of potential climate-related risks and opportunities was developed and refined during the scenario analysis to focus
on those that could materially impact the Group. The risks and opportunities the Group faces from climate change include not only the
physical aspects but also legal, policy and commercial changes in the global markets in which we operate. To respond to these risks, the
Group will need to take business-wide action and build resilience through mitigation, adaptation, and business continuity planning. We
feel that our response to the COVID-19 pandemic has given us strong learning to utilise in the event of any event requiring serious business
continuity planning.
OUR MATERIAL CLIMATE-RELATED RISKS IDENTIFIED DURING THE SCENARIO ANALYSIS
TRANSITIONAL RISKS
PHYSICAL RISKS
• Increase in extreme acute weather events
locally and flash flooding events from
increased/prolonged participation
• Increased frequency and intensity of acute
weather events globally
• Coastal flooding driven by sea level rises
• Temporary increases to the cost of
living during the transition to low carbon
technologies
• Legislation introduced to ban fossil fuel use
for fuel and energy generation and to favour
renewable energy generation
• Market/stakeholder pressure to switch all
sites onto renewable energy to meet pledged
carbon reduction and net zero targets
ACUTE
PHYSICAL
CHRONIC
PHYSICAL
MARKET
POLICY AND
LEGAL
REPUTATION
167
ANNUAL REPORT & ACCOUNTS 2023
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
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The first table below shows the material physical risks and opportunities assessed using climate-related scenario analysis, and the second
table shows the material transition risks and opportunities. We plan to continue to review and develop the comprehensive list of potential
climate-related risks and opportunities as a minimum, on an annual basis, or more frequently in line with any significant changes to climate
science, technology, and legislation.
Material physical climate-related risks and opportunities identified during the scenario analysis
KEY
Low
Medium
High
Very High
S
M
L
< 5 years
5-15 years
15+ years
CLIMATE
SCENARIO
(°C)
3-4
MATERIALITY
LIKELIHOOD,
EXPECTED TIMESCALE
FOR IMPACT
Likely
(60%)
L
Action required in the
medium term
MANAGEMENT APPROACH
AND ADAPTIVE CAPACITY
Assess sites in coastal
regions through mapping
across retail estate. Where
necessary consideration
will be given to changing
site locations for sites in
flood plains to mitigate this
risk.
3-4
2-3
3-4
2-3
Very likely
(80%)
S M L
Maintain current
processes to manage
risk
Ensure Business Continuity
Plans are updated and
tested accordingly for each
office location to ensure
risk is mitigated. Ensure key
staff have ability to work
remotely and from home to
naturally reduce this risk.
Virtually
certain
(99-
100%)
M L
No action required to
manage risk
The business model needs
to pivot accordingly
to any change in
sporting timetable. The
organisation’s ability
to adapt to sporting
disruption has been
demonstrated under other
circumstances such as
COVID-19 and 888 is well
equipped to continue this,
based on lessons already
learned from previous
challenges.
RISK
IMPACT/OPPORTUNITY
Safety risk to colleagues from
travel and infrastructure flood
damage to offices, LBOs and
employee homes located in
coastal regions. Increase in
costs for building repairs and
reinforcement to mitigate
against future events e.g.,
flood defences and insurance
costs or refused reinsurance
in vulnerable areas.
Potential disruption to
business services due
to energy supply and
communication services
disruption e.g., telecoms
and phone lines due to
damage. Health and Safety
risk to employees located in
offices, LBOs and homes due
to damage and potential
increase in employee
absence or requirement to
work from home. Increased
overhead costs for building
repairs.
Opportunity: reduce
emissions from commuting
and mitigate employee
absence due to improved
capacity for remote working
Loss of revenue as a result
of the cancellation or
rescheduling of sporting
events.
COASTAL
FLOODING
DRIVEN BY SEA
LEVEL RISE
INCREASE
IN EXTREME
ACUTE
WEATHER
EVENTS
LOCALLY E.G.,
HURRICANE
INTENSITY,
FREQUENCY
AND
GEOGRAPHICAL
DISPARITY,
FLASH
FLOODING
EVENTS AS
A RESULT OF
INCREASED/
PROLONGED
PRECIPITATION
INCREASED
FREQUENCY
AND INTENSITY
OF EXTREME
ACUTE
WEATHER
EVENTS
GLOBALLY
168
888 HOLDINGS PLC
CLIMATE
SCENARIO
(°C)
1.5-2
2-3
1.5-2
2-3
1.5-2
MATERIALITY
LIKELIHOOD,
EXPECTED TIMESCALE
FOR IMPACT
MANAGEMENT APPROACH
AND ADAPTIVE CAPACITY
Very likely
(80%)
S M Ongoing review of
economic conditions in
main markets to analyse
effects on customer
disposable income.
Thresholds for spend and
affordability checks to be
reviewed periodically.
Review of retail colleague
pay in line with changing
economic conditions.
Maintain current
processes to manage
risk
Likely
(60%)
S M L
No action required to
manage risk
Likely
(60%)
S M
Maintain current
processes to manage
risk
Likely
(60%)
S M L
Maintain current
processes to manage
risk
Maintain current
processes to manage
risk
Very likely
(80%)
S M Use previous situations
e.g., COVID-19 as a proxy
for modelling potential
impact. Other options to
be reviewed as part of the
Planet pillar of the ESG
framework.
RISK
IMPACT/OPPORTUNITY
TEMPORARY
INCREASES TO
THE COST OF
LIVING
DURING THE
TRANSITION TO
LOW-CARBON
TECHNOLOGIES
Economic constraints mean
customers may have less
disposable income to spend
on leisure and gambling
activities, resulting in a loss
of revenue for the business.
Increased risk of vulnerability
to harmful gambling for
clients in high-risk groups.
Demand from employees,
especially those on national
living wages, for increase
to wages due to widescale
increase in cost of living.
Loss of profit, driven by an
increase in overhead energy
costs (commercial and
domestic) and concerns
around energy security
issues (e.g. restricted periods
of energy use/blackouts)
affecting service delivery,
and client access to services,
especially at LBOs.
Opportunity: Long-term
energy security within
localised energy grids from
renewable energy generation,
with the potential to stabilise
market energy prices.
Opportunity to identify peak
times for energy consumption
and aim to reduce this,
saving costs and lowering
the carbon footprint of these
sites.
LEGISLATION
INTRODUCED
TO PLACE
A BAN ON
FOSSIL FUEL
USE FOR FUEL
AND ENERGY
GENERATION
AND
INTRODUCTION
OF LEGISLATION
TO FAVOUR
RENEWABLE
ENERGY
GENERATION
REQUIREMENT
TO SWITCH
ALL SITES
UNDER 888’S
CONTROL ONTO
RENEWABLE
ENERGY DUE
TO MARKET/
STAKEHOLDER
PRESSURE
AND TO MEET
PLEDGED
CARBON
REDUCTION
AND NET ZERO
TARGETS
Transition to green energy for
global sites can be difficult
due to limited infrastructure in
place, and often comes at a
higher overhead cost.
2-3
Very likely
(80%)
S M
Maintain current
processes to manage
risk
Renewable energy is
sourced where possible
globally through power
purchase agreements.
Longer-term strategy to
be reviewed as part of the
Planet pillar of the ESG
framework.
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THE IMPACT OF IDENTIFIED CLIMATE-RELATED RISKS AND OPPORTUNITIES ON OUR BUSINESS
Through wider strategy measures to drive energy efficiency and our transition plan, we have already started to reduce our exposure to
some of the material transition risks.
Overall, our priorities in transitioning to a low-carbon economy are to focus on addressing the identified transitional risks across operations,
reducing our global carbon footprint, assessing the efficiency of resources, and improving the efficiency with which energy is used. A high-
level view of the impact of climate-related issues across our strategy and businesses is provided below. Our senior management will review
the opportunities for mitigating the impacts of the risks identified in the climate-related scenario analysis, particularly those deemed to be
of significant risk.
Summary of the impact of climate-related issues on the Group’s strategy and businesses
CATEGORY
IMPACT ON STRATEGY AND BUSINESSES
PRODUCTS AND
SERVICES
SUPPLY CHAIN AND
VALUE CHAIN
OPERATIONS
We provide entertainment to our customers through a service model, with the majority of our interactions
taking place online. As a result, our core digital product offering has a low environmental impact. We strive
to reduce GHG emissions from our offices, Licensed Betting Offices and data centres; changes to our core
product offering as part of a transition to a low-carbon economy are not being considered. Likewise, we
are not planning any research and development of low-carbon products/services is not currently being
considered. The potential impact on our services is outlined in the scenario results earlier in this chapter
along with the relevant mitigations.
The transition risks identified by the scenario analysis in a low-carbon economy will also be faced by our
business’s supply chain and wider value chain, which may lead to increases in prices and further cost
increases. The importance of the supplier engagement activities and engaging with others in the value
chain is key during the transition and discussed in the transition plan.
To manage exposure in the 3-4°C scenario where physical risk dominates, our priority is to focus on
actions to preserve the continuity of the business should any of the material physical risks materialise. The
impact on operations and location of facilities will need to be reviewed in response to the coastal flooding
risk identified, and a mapping exercise undertaken to assess this risk and consideration given to changing
site locations if required.
ACQUISITIONS OR
DIVESTMENTS AND
ACCESS TO CAPITAL
The climate-related risks and opportunities identified by the scenario analysis will be considered during
any future acquisitions, divestments, or access to capital decisions made as part of the ESG Committee of
the Board’s overall decision-making process.
We need to undertake further work to fully integrate the outputs of the scenario analysis into the strategy and financial planning cycles
moving forward and develop metrics to monitor climate-related risks and potential financial impacts as required. We may look to disclose
quantitative climate-related scenario analysis outputs in future reporting periods.
THE RESILIENCE OF OUR STRATEGY TO CLIMATE CHANGE CONSIDERING DIFFERENT CLIMATE-RELATED SCENARIOS
The Group’s ESG strategy is validated annually by the Board and periodically by the ESG Committee of the Board to ensure it remains
relevant and resilient to the changing requirements of the sector and the wider climate. Due to the dynamic nature of the economy and
climate change, scenario analysis will be reperformed every three years or after any material business changes, in line with guidance
from the Department for Business, Energy and Industrial Strategy. Elements of the strategy may be refreshed earlier if there are significant
changes in the external or internal environment.
We believe our net zero plan supports the resilience of the business to the varying climate change scenarios considered. We realise we
have more work to do and we need to continue to evolve to meet the recommendations of the TCFD and prepare for other future ESG and
climate-related disclosures.
FUTURE PRIORITIES
In 2024, we may complete the following work on our climate strategy to further enhance and increase the quality of TCFD disclosures:
• Utilise the scenario analysis to inform our strategy and financial planning, including developing detailed assessments of the potential
costs if the risks were to occur.
• Climate change risk mitigation and adaptation strategies will be developed, whilst also considering policies that take advantage of any
opportunities identified.
• Consider different lenses to our scenario analysis looking at the different business models and locations across our business.
In the longer term, a more detailed quantitative scenario analysis approach will be developed to enhance future TCFD reporting
disclosures.
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888 HOLDINGS PLC
RISK MANAGEMENT
Climate change has been integrated into our risk management framework and the processes for identifying, assessing, and managing
climate-related risks are detailed below.
As part of our risk management procedures, the Board takes account of the significance of environmental matters to our business. The
Board factors into the risk assessment impact, likelihood, and appetite considerations, and risk is managed in the context of the Board’s
overall risk appetite. Business risks are identified, assessed, managed, monitored, and reported in accordance with the Risk Management
Policy. As part of this process, our teams are advised on emerging regulatory risks. Our teams also identify climate-related risks and
opportunities, and these issues are cascaded upwards by representatives from around the business for discussion at the ESG Forum.
Our business has evolved its approach to risk in recent years, with climate and ESG risks now included on the wider business’s risk register
in the same format as other key business risks. We will continue to examine our climate and ESG risks and will consider re-running scenario
analysis workshops in 2024.
FUTURE PRIORITIES
Throughout 2024, we will continue to develop the climate risk management processes and may consider the following actions:
• Re-run scenario analysis to ensure the accurate capturing of risk to the business
• Consider wider ESG risks to the business outside of climate risks identified previously
• The climate-related risks will be reviewed on a regular basis to ensure they are up to date with the most recent scientific understanding
and legislative requirements.
METRICS AND TARGETS
The data for the Group’s climate-related metrics and targets and its streamlined energy and carbon reporting requirements are set out on
the following pages.
MONITORING OUR PROGRESS — TCFD CROSS-INDUSTRY CLIMATE-RELATED METRICS AND TARGETS
We continually review our climate metrics and targets to ensure the underlying data is accurate and complete, and to ensure the metrics
are providing the information the business and stakeholders need to monitor performance and review our progress. The table below
outlines our approach and progress with the TCFD cross-industry metrics.
OUR APPROACH AND PROGRESS WITH THE TCFD CROSS-INDUSTRY METRICS
TCFD CROSS-INDUSTRY
METRIC CATEGORY
888’S APPROACH
GHG EMISSIONS
Metrics
Our absolute GHG emissions and emissions
intensity ratios are found on pages 173 and 174. The
methodology for calculating the GHG emissions is
also contained within this section.
Our climate targets
Net zero target (Scope 1 and 2) by 2030
Net zero target (Scope 3) by 2035
2023 PROGRESS AND FUTURE PRIORITIES
In 2023 significant work was undertaken to re-
baseline our emissions as a combined Group. 2023
will now be our baseline for all reporting of progress
to net zero.
Year on year our emissions increased 31% across
our full value chain due to this re-baselining and
the move to a different methodology. Our scope
1 and 2 emissions dropped by 6%. Our scope 3
emissions increased by 33%, primarily due to the
new methodology used to compile these numbers.
Environmental metrics and targets
We track these metrics internally but have yet to
report these outside the wider business. In 2024
we will consider how best to evolve our external
reporting in this area. The onboarding of the
Normative platform has significantly enhanced our
reporting capabilities in this area which gives the
Group a strong platform to enhance disclosures.
TRANSITION RISKS
Scenario analysis was completed in 2022, which
identified three material transition risks, including:
Priority 1 of the transition plan will reduce our
exposure to regulatory transition risks.
• Regulations being introduced to place a ban on
fossil fuels and/or the introduction of legislation
to favour renewable energy generation; and
• Economic constraints in a low-carbon economy
may result in customers having less disposable
income to spend on leisure and gambling
activities.
Following the scenario analysis, and as the
transition plan develops, we will review the
appropriateness of developing future metrics
surrounding the amount and extent of the business
activities vulnerable to transition risks.
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TCFD CROSS-INDUSTRY
METRIC CATEGORY
888’S APPROACH
PHYSICAL RISKS
Scenario analysis was completed in 2022, which
identified three material physical risks.
One of the physical risks related to coastal flooding
driven by sea level rise.
2023 PROGRESS AND FUTURE PRIORITIES
Following the scenario analysis and as our
transition plan develops, we will review the
appropriateness of developing future metrics
surrounding the amount and extent of the business
activities vulnerable to physical risks.
CLIMATE-RELATED
OPPORTUNITIES
Scenario analysis was completed in 2022, which
identified material climate-related opportunities,
including:
• reducing emissions from employee commuting;
and
• energy efficiency and long-term energy security
from renewable energy generation.
Long-term power purchase agreements were
secured in the UK for our retail estate in 2023. We
continue to look for opportunities to drive efficiency
of spend and also long-term security of renewables
across the Group. We have made good progress
rolling out smart meters across the UK retail estate
and will consider how we can continue this rollout
in 2024.
CAPITAL DEPLOYMENT
The ESG Committee of the Board will review and
approve the expected cost of delivering on the
Group’s decarbonisation ambitions over time,
which is likely to be the biggest climate-related
requirement for capital deployment.
INTERNAL CARBON
PRICES
EXECUTIVE
REMUNERATION
An internal carbon price has not been adopted
by the Group to date as the focus has been
on integrating the William Hill business and
implementing the three priority initiatives to reduce
GHG emissions.
The ESG Committee of the Board reviews the
implementation of the ESG strategy and considers
the extent to which additional ESG metrics and
targets (including climate) should be incorporated
into executive remuneration.
We are considering the financial plans for our
decarbonisation ambitions and whether to develop
a long-term green energy strategy and budget,
to ensure investment in renewable energy is
maintained. The Group will consider whether any
further metrics and targets for capital deployment
are required in future reporting periods.
In 2024, we will continue to review and evaluate
whether the use of internal carbon prices would be
appropriate to assist to incentivise decarbonisation
across our operation.
Emission reduction targets were a part of our
executive and colleague bonus structure in 2023
and will remain a key part of our remuneration plan
in 2024.
172
888 HOLDINGS PLC CLIMATE REPORTING — GHG EMISSIONS (TCFD REPORTING)
Data presentation
In 2023 we have completed a re-baselining exercise following the purchase of the William Hill business, merging our data sources into
one single source of truth for the newly enlarged Group. Previously, multiple methodologies were used for the individual businesses so
harmonising our data processes was an important step for the Group. We have now switched to using the Normative carbon accounting
platform. Utilising their methodology, our emissions are now based on 80% spend data utilise Environmentally-Extended Input Output
(EEIO) models (source primarily Exiobase v3.8.2). The remaining data is covered by activity data, which relates mainly with utility data
(sources include: DESZN (previously DEFRA), AIB and IEA). These models and databases are utilised in line with the Greenhouse Gas
Protocol but variances can exist. We believe this re-baselining exercise has been undertaken cautiously and gives the Group a strong
platform to build on in future years. In 2024 we will engage with our key suppliers to accurately represent our share of their emissions in
future reporting and collaborate to decrease their emissions and therefore our own Scope 3 numbers.
A summary of our performance across the three Scopes this year is as follows:
• Scope 1 (Data source: DESZN, previously DEFRA): saw a slight decrease in kWh consumption but a significant increase due to a new
fugitive emissions methodology and reclassified heating data from Scope 2
• Scope 2 (Data source: IEA/AIB): Despite a slight decrease in total kWh consumption and emissions (location and market-based), Scope
2 emissions decreased further due to reclassified heating data now reported under Scope 1, while renewable energy usage remained
constant.
• Scope 3 (Data source: Exiobase v3.8.2): As discussed previously our figures have increased year on year due to the change in
methodology and move to a new supplier. We believe this gives us a strong platform for future years and significantly simplifies our data
processing as one, larger organisation. Updates on areas with significant change:
– Purchased goods and services: High variance due to new databases and classification system, increased supplier engagement
planned for accuracy. (Spend data)
– Capital goods: Merged with purchased goods and services due to data overlap. (Emissions reported in Category 1)
– Fuel and energy: Linked to Scope 1 & 2 kWh changes, follows UK government dataset. (Activity data)
– Waste: New waste data has been added, spend added to purchased goods and services per best practices. (Activity data)
– Employee commuting: New methodology with sampling of colleague data utilised, considers WFH emissions, future efforts aim for
better representation of colleagues across the globe. (Activity data)
– Downstream leased assets: All site emissions included in Scopes 1 & 2.
– Investments: Data used, future alignment with PCAF planned.
All figures are reported under the Greenhouse Gas Protocol Corporate Accounting and Reporting Standard. The calculation methodology
for GHG emissions is outlined above.
OUR NET ZERO TARGETS AND ABSOLUTE GHG EMISSIONS
Scope
Scope 1
Scope 2 (market-based)
Total Scope 1-2 (market-based)
Scope 2 (location-based)
Scope 3
Total emissions (market based)
Targets
Net zero by 2030: achieve 80% reduction
in Total Scope 1 & 2 from 2023 baseline
(market-based)
Net Zero by 2035: using the ‘80 by 60’
strategy
Targets for the enlarged 888 Group
to be re-baselined in FY23
FY23
Global
emissions
(tCO2e)A
1,362
2,333
3,695
12,536
FY22
Global
emissions
(tCO2e)A
975
2,966
3941
14,128
125, 327
94,249
FY22/23
% change
+40%
-21%
-6%
-11.26%
+33%
129,022
98,191
+31%
A For true comparison we have included a full year of William Hill’s emissions for 2022, previously published numbers included only six months due to the
business being acquired in mid-year 2022.
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OUR SCOPE 3 EMISSIONS PER CATEGORY
Scope 3 Category
Category
Purchased goods and services
Investments
Fuel- and energy-related activities
Employee commuting
Business travel
Upstream transportation and distribution
Waste generated in operations
Capital goods
Downstream leased assets
Total
FY22
Global emissions
(tCO2e)
2022A
79,359
2,039
1,144
3,630
2,238
3668
217
1,846
107
94,249
FY23
Global emissions
(tCO2e)
2023
102,723
3,179
3,499
10,656
2,655
2,244
371
0
0
125,327
% of
Total Scope 3
emissions
% of total scope 3
81.96%
2.54%
2.79%
8.50%
2.12%
1.79%
0.30%
0.00%
-100%
A For true comparison we have included a full year of William Hill’s emissions for 2022, previously published numbers included only six months due to the
business being acquired in mid-year 2022.
STREAMLINED ENERGY AND CARBON REPORTING REQUIREMENTS (SECR)
The Group’s Streamlined Energy and Carbon Reporting requirements (SECR) are shown in the table below. The methodology used is the
GHG Protocol. The energy and carbon reports are aligned with the boundaries of the financial statements. We continue to drive ongoing
improvements around energy efficiency around the business, building on the significant progress of securing long-term renewable power
purchase agreements and from the first wave of rolling out smart meters across our UK retail estate.
INTENSITY RATIO
We will report our emissions intensity ratios in the following areas:
• GHG emissions per headcount (tCO2e/employee);
• emissions per turnover in USD (tCO2e/US £m);
OUR GLOBAL ENERGY AND GHG EMISSIONS INTENSITY RATIOS
Corporate metric/year
Global energy consumption (kWh)
Revenue
Scope 1 emissions (tCO2e)
Scope 2 emissions (location based) (tCO2e)
Total Scope 1 and 2 emissions (tCO2e)
Emissions per turnover tCO2 ratio
Emissions per headcount tCO2e/employee ratio
Total headcount
ENVIRONMENTAL INITIATIVES
2023
Parameter amount
52,090,026
£1,710m
1362
2333
3695
2.16
0.325
11,366
We have focused on reducing waste, water usage and plastic across our operations. In 2024, the Group will review the appropriateness of
disclosing wider environmental metrics and targets to track performance.
Our key wider environmental initiatives in 2023:
• Renewable energy: Given the size of our retail estate in the UK, switching to renewable energy has made a big difference to our
emissions. In 2023 we secured a long-term power purchase agreement for renewable energy in the UK, securing consistent pricing and
long-term access.
• Smart meters: As detailed in the ESG section of the report, smart meters have made a big difference to energy consumption in our retail
estate. This has driven efficiencies in numerous ways, for example by identifying outlier shops that have not been following the correct
shutdown procedures overnight leading to unnecessary energy usage.
• Carbon offsets: We used a small amount of offsetting in 2023, investing in projects preventing deforestation in Guatemala, Congo and
Cambodia. This offset 2,000 tonnes of carbon across the three projects. These projects meet the Verified Carbon Standard and their
references are VCS 1622, 934 and 1748.
174
888 HOLDINGS PLC CLIMATE SCENARIO ANALYSIS METHODOLOGY (TCFD REPORTING)
We performed climate-related scenario analysis for the first time last year under the guidance of external advisors and the methodology
used is outlined below. We recognise that the risks involved in climate change are ever evolving and developing so we may look to
undertake further scenario analysis in 2024.
The scenario analysis was completed in line with recommendations published by the TCFD and aligns closely with ISO 14091 (2021) and
other publicly available resources. A qualitative approach was used and the level of action required to respond to the risk was identified.
This approach was used to ensure that a clear narrative around the scenarios and the associated risks was developed first before
attempting extensive quantification, which without the former may have been arbitrary. The key features of the climate scenarios are
detailed on pages 167 and 168 and the results of the scenario analysis are shown in the TCFD Report on page 169.
LIMITATIONS OF THE SCENARIO ANALYSIS PROCESS
The following limitations were identified during the prior year’s scenario analysis process:
• The definition of likelihood is assigned based on qualitative (opinions using scientific understanding of climate change and timescales)
rather than quantitative aspects. This may allow for inconsistencies in determining likelihood, which is subsequently used to rank risks by
materiality. When revisiting scenario analysis in the future other variables in place of ‘likelihood’ could be used to assign materiality such
as ‘impact on company objectives vs level of action required’.
• The scenarios are built around published climate models, reports, and other resources. There are limitations within the climate models
themselves and the narrative these generate due to the high levels of scientific uncertainties embedded into climate change.
• The scenario analysis considers three time horizons, one of which (short) is only up to 5 years. Company strategy is often built
around short time horizons (financial forecasts and company objectives etc.) rather than long time horizons (e.g. up to 2050) due to
increased uncertainty. Considering long time horizons is often unfamiliar and uncomfortable for organisations but is a requirement when
considering impacts of climate change. This should be an area for improvement when reviewing climate scenario analysis in the future
and 888 should begin to consider a wider range of time horizons.
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FINANCIAL STATEMENTS
SUPPLEMENTARY INFORMATION
ESG SUPPLEMENTARY INFORMATION
SUPPLEMENTARY PEOPLE DATA
Metric description
Average amount spent per FTE on training and development
Average hours per FTE of training and development
Hours volunteered
Average hiring cost per FTE
Gender data:
Women on the Board as at 31 December 2023
KPI
£130.51
16.53
3171.5
£707.93
Number
of Board
members
Percentage of
the Board
Number of
senior positions
on the Board
(CEO, CFO, SID
and Chair)
Number in
executive
management
as at 31
December
2023
Number
in senior
management
as at 31
December
2023
Percentage
in executive
management
Percentage
in senior
management
4
3
57%
43%
2
1
10
1*
91%
9%
43
25
63%
37%
Men
Women
* Includes Company Secretary
% Women in company
Female
Male
% Women in Tech (Product & Tech Business Unit)
Female
Male
% of women in STEM-related position (Product & Tech Business Unit/Total HC)
12%
Location data:
Breakdown of employees by segment
Retail
Online and corporate
Overall
Ethnic background reporting as at 31 December 2023
5,251
6,085
11,336
297
1,077
1,374
46.32%
53.68%
21.62%
78.38%
6,678
4,658
11,336
Number of
Board members
Percentage of
Board members
Number of senior
positions on the Board
(CEO, CFO, SID, Chair)
7
100%
3
Number in senior
management
(executive committee
and their direct
reports
Percentage in
senior management
(executive committee
and their direct
reports)
65
3
2
2
1
89%
4%
3%
3%
1%
White British or other white
(including minority-white groups)
Mixed/multiple ethnic groups
Asian/Asian British
Black/African/Caribbean/Black
British
Not specified/prefer not to say
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888 HOLDINGS PLC ESG SUPPLEMENTARY INFORMATION CONTINUED
Breakdown of workforce by age
Age group
18-24
25-34
35-44
45-54
55-64
65+
Overall
Breakdown of employees by contract type
Full time
Part time
Contractors
Breakdown of contractors, agency workers, franchise workers and third-party employed staff
Total number of new hires
Still active (Dec-23)
Inactive (Dec-23)
Total
Internal moves filled vacancies
Total employee turnover rate
Overall:
Volume roles:
Non-volume roles:
Voluntary employee turnover rate
Overall:
Volume roles:
Non-volume roles:
Employee engagement coverage : Coverage: 100%; Response rate: 88%
% employees who are in receipt of an engagement survey, Aggregated Peakon response rate
Employee engagement rate (ENPS): eNPS — Company Overall: 11; UK Retail: 5; Non Retail: 19
eNPS for question 'How likely is it that you would recommend 888 William Hill as a place to work?'
Headcount
1,591
3,960
2,812
1,519
1,180
274
11,336
6,676
4,660
138
2,598
1,076
3,674
358
35.99%
40.76%
24.78%
32.56%
37.62%
17.31%
177
ANNUAL REPORT & ACCOUNTS 2023 STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
SUPPLEMENTARY INFORMATION
SHAREHOLDER INFORMATION
EXTERNAL AUDITORS
Ernst & Young LLP
1 More London Place
London
SE1 2AF
UK
EY Limited
PO Box 191 Regal House
Queensway
Gibraltar
CORPORATE BROKERS
Jefferies International Limited
J.P. Morgan
LEGAL ADVISERS
Latham & Watkins
99 Bishopsgate
London
EC2M 3XF
UK
Hassans
57/63 Line Wall Road
Gibraltar
Herzog Fox Neeman
Asia House
4 Weizman Street
Tel Aviv
Israel 64239
COMPANY SECRETARY
The company secretary is Elizabeth Bisby.
Email:
corporate.secretary@888holdings.com
Strait Secretaries Limited
57/63 Line Wall Road Gibraltar
SHAREHOLDER SERVICES
All enquiries relating to Ordinary Shares,
Depository Interests, dividends and
changes of address should be directed
to the Group’s Transfer Agent:
Link Group
The Registry
34 Beckenham Road
Beckenham
Kent
BR3 4TU
UK
Tel: 0371 664 0300
Email:
shareholderenquiries@linkgroup.co.uk
www.signalshares.com
PRINCIPAL BANKERS
Barclays Bank Plc
1 Churchill Place
London
E14 5HP
UK
COMPANY INFORMATION
REGISTERED OFFICE
888 Holdings Plc
Suite 601/701 Europort
Europort Road
Gibraltar
Tel: +35020049800
888 Holdings Plc
1 Bedford Avenue
London
WC1B 3AU
FURTHER INFORMATION
Further information about the Group
can be found on our corporate website:
corporate.888.com
To contact the Investor Relations team email:
ir@888holdings.com
To contact the company secretary email:
corporate.secretary@888holdings.com
178
888 HOLDINGS PLC DESIGN AND PRODUCTION
www.carrkamasa.co.uk