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28 February 2008

Sir Ian Robinson Chairman. 28 February 2008. Brian Wallace Group Finance Director. 28 February 2008. Summary of performance. 2006 £m 262.2 (44.6) 24.0 241.6 17.5% 304.4 21.7p. Year to 31 December. 2007 £m 420.0 (68.0) - 352.0 15.6% 470.4 47.4p.

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28 February 2008

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  1. Sir Ian Robinson Chairman 28 February 2008

  2. Brian Wallace Group Finance Director 28 February 2008

  3. Summary of performance 2006£m 262.2 (44.6) 24.0 241.6 17.5% 304.4 21.7p Year to 31 December 2007£m 420.0 (68.0) - 352.0 15.6% 470.4 47.4p Variance B(W)% 60.2 (52.5) (100.0) 45.7 54.5 118.4 Continuing operations Operating profit(1) Net finance costs(1) Interest income on Hotels sale proceeds Profit before tax(1) Effective tax rate(1) EBITDA(1) EPS(1) (1) Before non-trading items

  4. Betting and Gaming Year to 31 December Gross Win Operating Profit VarianceB(W)% (6.0) 27.6 24.2 961.3 (337.5) (44.5) 60.2 2007£m 187.8 21.7 55.0 183.6 (7.0) (21.1) 420.0 2006(1)£m 199.8 17.0 44.3 17.3 (1.6) (14.6) 262.2 2006£m 715.8 84.0 144.4 46.1 - - 990.3 VarianceB(W)% 3.3 22.7 8.4 507.6 29.9 2007£m 739.3 103.1 156.5 280.1 7.4 - 1,286.4 UK Retail Ireland, Belgium & Italy eGaming Telephone Betting Other (2) Corporate Costs Total (1) Restated divisions operating profit. Total operating profit remains unchanged (2) Other is casino and international development operations

  5. UK Retail – Results 2006(1) £m 510.5 205.3 715.8 (31.9) 683.9 4.0 (75.0) (180.6) (89.1) (58.6) (84.8) (413.1) 199.8 Variance B(W)% (3.8) 21.0 3.3 2.6 (11.5) (5.4) 0.9 (9.2) (7.9) (6.0) 2007 £m 490.9 248.4 739.3 (37.5) 701.8 4.0 (72.1) (201.3) (93.9) (58.1) (92.6) (445.9) 187.8 Year to 31 December OTC gross win Machines gross win Total gross win Adjustments to gross win (2) Net revenue Associate income Gross profits tax Staff costs Property costs (3) Content costs (4) Other costs (inc. depn and FOBT tax) (5) Operating costs Operating profit (1) Restated revenue, costs and operating profit (2) Fair value adjustments, VAT (3) Rent, rates and utilities (4) Pictures, data, levy, Sky (5) Depreciation = £40.9m (2006: £34.7m), FOBT tax = £13.8m (2006:£5.6m)

  6. UK Retail – KPIs Variance B(W)% (1.8) (0.5) 21.6 Year to 31 December 200616.9% 1.1% 0.1% 0.8% 4% 2.9% £8.39 8,189 £481 200717.1% (4.1)% 20.3% 2.9% 3% 6.1% £8.24 8,147 £585 OTC margin Like for like OTC gross win growth Like for like machines gross win growth Like for like total gross win growth Like for like total costs (1) increase Like for like shop staff costs increase Stake per slip (2) Average number of machines Average weekly gross win per machine (2) Slips exclude machines (1) Excludes VAT, Gross profits tax and FOBT tax

  7. Ireland 2007£m 61.8 (0.4) 61.4 (4.4) (36.9) 20.1 5.4% 215 2006(1)£m 48.9 (0.4) 48.5 (5.1) (29.4) 14.0 10.4% 195 VarianceB(W)% 26.4 (25.5) 43.6 10.3 Year to 31 December Gross win Fair value adjustments Net revenue Duty / Gross profits tax Other costs Operating profit Like for like gross win increase Shop numbers at the end of the period (1) Restated costs and operating profit

  8. eGaming – Net revenue Year to 31 December VarianceB(W)% 14.7 5.1 (11.4) 36.5 7.0 2007£m 52.2 43.1 31.0 17.2 143.5 2006(1)£m 45.5 41.0 35.0 12.6 134.1 Sportsbook Casino Poker Games Net revenue

  9. eGaming – Results 2006(1)£m 144.4 (10.3) 134.1 (6.9) (2.1) (12.6) (29.0) (17.3) (7.8) (14.1) (82.9) 44.3 %age of net revenue 5.5 1.9 12.5 12.6 14.0 3.6 11.6 56.2 38.3 %age of net revenue 5.2 1.6 9.4 21.6 12.9 5.8 10.5 61.8 33.0 VarianceB(W)% 8.4 7.0 2.8 24.2 2007£m 156.5 (13.0) 143.5 (7.9) (2.7) (17.9) (18.1) (20.1) (5.2) (16.6) (80.6) 55.0 Year to 31 December Gross win Fair value adjustments (2) Net revenue Gross profits tax Levy and licences Staff costs Software & geographical partners (3) Marketing (inc. affiliates) Banking and chargebacks Other costs (inc. depn) Operating costs Operating profit (1) Restated costs and operating profit (2) Adjustments for free bets, promotions and bonuses (3) Payments to third party software and platform providers and geographical partners

  10. eGaming – KPIs Year to 31 December VarianceB(W)%9.5 1.3 (31.9) (53.6) 2007601 307 £120 £86 2006549 303 £91 £56 Unique active players (000s) (1) Real money sign-ups (000s) (2) Cost per acquisition (3) Adjusted cost per acquisition (4) (1) A player who contributed to rake and/or placed a wager during the period (2) A new player who has registered and deposited funds during the period (3) Total of all online and offline marketing spend (including promotions and bonuses netted from revenue) and all affiliate expenses relating to deals where affiliates are paid a one-off fee for each sign-up and all bonus costs (except those relating to sign-ups from revenue share affiliates) divided by the aggregate real money sign-ups from non-affiliate sources and the number of real money sign-ups through affiliates that are paid a one-off fee. (4) As per cost per acquisition, but excluding any marketing costs attributed to CRM activity.

  11. Telephone Betting – Results Year to 31 December %age of net revenue excl High Rollers 31.4 10.9 2007£m 30.5 (0.3) 30.2 249.6 279.8 (37.2) (15.9) (9.5) (3.3) (30.3) (59.0) 183.6 2006(1)£m 33.9 (0.3) 33.6 12.2 45.8 (7.3) (2.6) (9.0) (3.3) (6.3) (21.2) 17.3 VarianceB(W)% (10.0) (10.1) 1,945.9 510.9 (178.3) 961.3 %age of net revenue excl High Rollers 26.8 9.8 Gross win exc. High Rollers Fair value adjustments Net revenue exc. High Rollers High Rollers’ net revenue Net revenue Gross profits tax Levy Staff costs Direct operating costs (2) Other costs (inc. marketing and depn) Operating costs Operating profit (1) Restated costs and operating profit (2) Direct operating costs include telephone, bandwidth and banking costs

  12. Telephone Betting - KPIs(excl High Rollers) VarianceB(W)% (8.5) (3.4) (7.6) (7.7) Year to 31 December 20067,832 59p 7.2% 124.4 209 20077,165 61p 7.1% 115.0 193 No. of calls (000s) (1) Agent cost per call Gross win margin Unique active players (000s) (2) Average monthly active player days (000s) (1) Number of calls (excluding customer service calls) (2) A player who has placed a wager during the period

  13. Analysis of 2007 Capex 2007£m18.8 15.2 - 13.0 15.2 62.2 5.8 3.0 71.0 37.8 46.3 155.1 2006£m38.8 15.7 6.3 4.5 17.0 82.3 5.1 - 87.4 - 32.4 119.8 Year to 31 December CapexUK development (1) FOBTs and EPOS Xtra Ireland, Belgium and Italy Other (including IT: £6.7m; 2006 - £8.0m) European Retail eGaming / Telephone Betting International development and casino Total Statutory and licence acquisitions (2)Sponsio Other (Italy: £26.6m, Casino: £10.7m, Ireland: £7.6m, UK: £1.4m) (1) Development = relocations, extensions and refurbishments, (2) Excludes £3.7 million (2006: £nil) cash obtained through acquisition of subsidiaries

  14. Cash Flow Year to 31 December 2006£m 264.7 (53.5) (119.8) 91.4 3,241.4 (4,208.4) 344.5 - (19.9) (551.0) (397.9) (948.9) 3.1 3.2 2007 £m421.1 (133.0) (155.1) 133.0 40.8 (84.6) 7.6 (70.4) 5.5 31.9 (948.9) (917.0) 1.9 3.1 2006£m (84.8) (9.0) (26.0) 2007 £m (62.4) (31.8) (60.9) Cash generated by operations Interest and tax PPE capital spend (1) Intangibles Acquired subsidiaries Total capital spend (1) Cash flow after interest, tax and capital Vernons/Hotels disposal proceeds Dividends paid Proceeds from issue of shares, convertibles and options Share buybacks Exchange and other movements Net borrowings movement Opening net borrowings Closing net borrowings Net debt to EBITDA ratio (1) Net debt to EBITDA ratio (1) adjusted for high rollers (1) Continuing operations only

  15. Christopher Bell Chief Executive 28 February 2008

  16. 2007 Overview • Record profits • Improved performance from UK Retail towards year end • Double digit profit growth from eGaming • Strong Telephone High Rollers performance • Established new business in Italy

  17. UK Retail • Renewed 8,190 strong gaming machine estate • New machine content • Winter evening opening • Improved betting content

  18. Euro 2008

  19. UK Retail – Product Development • Leading edge technology • Current testing: • Customer loyalty scheme • Self service terminals • Kiosk based shops • Enhanced content and product range • Active shop portfolio management Kiosk and SST – Ladbrokes Retail Marketing

  20. Ireland • Strong performance in 2007 • Acquisition of 54 shops in Northern Ireland during February • Market leaders in Northern Ireland and Republic of Ireland

  21. Italy • 26 shops trading • 10 corners trading • Focus on opening Bersani licences and ongoing shop acquisitions • Ladbrokes.it launched Q4 2007

  22. Spain • Sportium brand • JV with Cirsa Slot • Madrid operating licence • 60 sportsbetting outlets expected to start trading in the months following licence award • Further regional deregulation required

  23. Other International Development • China • Product development with AGTech • Great Gate shops • Vietnam • Fixed odds football lottery bid • Turkey • Sportsbetting licence opportunity

  24. Telephone Betting • Strong performance from High Rollers • Core business slightly down • High quality service to all Telephone customers

  25. eGaming • Continued double digit profit growth in 2007 • Leveraging the brand • Driving new customer acquisitions • Jurisdictional prudence • Management team strengthened

  26. eGaming Ed Andrewes Managing Director eGaming Andy Harris Managing Director Casino, Games & New Platforms Edward Ihre Managing Director Poker Paul Corson Marketing Services Director Richard Clark General Manager Sportsbook

  27. eGaming – Growth Acceleration • Increased investment in customer acquisition • Targeted NGR growth through • More aggressive Poker affiliates programme • TV advertising for Casino and Bingo • Increased investment in Nordic region • Flat operating profit in 2008 • Profit growth in 2009 and 2010

  28. UK Regulation • No longer pursuing new UK casino opportunity • Paddington Casino to be sold • 2005 Gambling Act from 1 September 2007 • Winter evening opening met expectations • TV advertising well received • 47th levy scheme determination

  29. Summary • Ongoing revenue and cost opportunities in UK Retail • Consolidation in Irish Retail • Focused investments in eGaming • High Rollers in Telephone Betting • International progress, with focus on Italy and Spain

  30. Outlook

  31. Q&A

  32. Appendix

  33. eGaming – KPIs Variance % B(W) 2007 2006 Year to 31 December Sportsbook Gross win margin 7.2% 6.4% Unique active players (000s) 421 398 5.8 Average monthly active player days (000s) 648 610 6.2 Yield per unique active player (£) (1) 124 114 8.8 Casino Unique active players (000s) 105 90 16.7 Average monthly active player days (000s) 82 72 13.9 Yield per unique active player (£) (1) 411 455 (9.7) Poker Unique active players (000s) 151 154 (1.9) Average monthly active player days (000s) 409 461 (11.3) Yield per unique active player (£) (1) 205 227 (9.7) Games Unique active players (000s) 148 126 17.5 Average monthly active player days (000s) 142 99 43.4 Yield per unique active player (£) (1) 116 100 16.0 (1) Revenue per unique active player for the period

  34. European Retail Year to 31 December Operating Profit Gross Win 2006(1)£m 199.8 14.0 3.0 - 216.8 Variance B(W)% Variance B(W)% 2007£m 187.8 20.1 3.2 (1.6) 209.5 2007£m 739.3 61.8 34.8 6.5 842.4 2006£m 715.8 48.9 35.1 - 799.8 UK Retail Ireland Belgium Italy Total (6.0) 43.6 6.7 (3.4) 3.3 26.4 (0.9) - 5.3 (1) Restated divisions operating profit. Total operating profit remains unchanged

  35. Restated operating profit Year to 31 December 2006 Restated£m 199.8 17.0 44.3 17.3 (1.6) (14.6) 262.2 Reported£m 195.4 17.3 47.0 17.7 5.9 (15.2) 268.1 Adj (1)£m - - - - (5.9) - (5.9) Adj (2)£m 4.4 (0.3) (2.7) (0.4) (1.6) 0.6 - UK Retail Ireland & Belgium eGaming Telephone Betting Other (3) Corporate Costs Total (1) Continuing operating profit restated for treatment of Vernons as discontinued (2) Restated divisions operating profit. Total operating profit remains unchanged (3) Other restated is casino and international development

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