William Hill is the UK’s leading bookmaker and one of the most recognised and trusted brands in the gambling industry, providing gaming and betting services across multiple channels.
We have been listed on the London Stock Exchange (WMH.L) since 2002 and employ c16,000 people in nine territories: the UK, Gibraltar, Israel, Bulgaria, Spain, Italy, the Philippines, Australia and the US.
Our business is comprised of four businesses: the highly cash-generative Retail land-based operation in the UK; the rapidly growing Online betting and gaming business; William Hill Australia which offers digital betting in the Australian market; and William Hill US which operates sports books in Nevada and is the exclusive bookmaker to the Delaware state sports lottery.
Retail operates 2,371 betting shops, representing 26% of UK’s licensed betting offices. It is our largest division, generating 56% of Group revenue in 2015 and employing around 12,200 people. Online is the leading provider of online betting and gaming to UK customers, with an estimated 15% market share by revenue, and is licensed to provide online betting and gaming in Italy and Spain. It generated 35% of Group net revenue in 2015 and has grown its net revenue at 20% CAGR over the last five years. William Hill Australia was created in 2013 through the acquisition of Sportingbet (including Centrebet) and tomwaterhouse.com. It contributed 6% of Group net revenue in 2015 and is only of the largest online betting companies in Australia, a market where online betting is growing at c14% per annum. William Hill US was created in 2012 through the acquisition of three small sports book operators in Nevada. It operates 55% of the casino-based sports books in the state, which is one of only four in the US that are allowed to provide sports betting.
Our strategy is to increase the group’s diversification by growing our digital and international revenues. Within this, we have three priorities to deliver further shareholder value. These focus on maximising our opportunity as one of the UK’s leading multi-channel operators, taking that proven experience into international markets and increasing our technological self-reliance to differentiate what we offer our customers.
Maximising the omni-channel potential of Retail and Online
UK customers are increasingly using both digital and land-based channels to bet. In 2015, William Hill had the largest betting shop estate in the UK and was the leading online operator by revenues.
We have a unique opportunity to drive towards a ‘one customer’ proposition that gives William Hill customers a more consistent and joined-up experience online, on their mobile devices and in shops.
Extending our expertise into international markets
We have built an innovative and highly competitive offering for customers. As regulations change and markets open up across the world, we are taking that offering into other regulated markets.
By diversifying our revenue streams, we reduce our exposure to fiscal, economic and regulatory change in any single market.
Increased differentiation through technology
We have already successfully differentiated our customer experience through both betting and gaming innovations and the breadth and depth of our product range.
While many other operators continue to rely exclusively on third parties’ software and technology, we are increasingly building our own solutions and optimising how we use third parties to build a bespoke William Hill technology. This gives us the platform for further innovation and differentiation.
Our business model
Our objective is to deliver superior shareholder returns by leveraging our core capabilities in both the UK and selected international markets.
Betting and gaming activities are the core of our business model, with individuals staking money on their opinion of a likely outcome of an event or on the chance of a gaming outcome.
William Hill offer a vast range of different betting and gaming products across different channels and in different countries within a responsible gambling framework to drive sustainable value for our shareholders.
THE RESOURCES WE NEED
Through funds generated by our operations or provided by shareholders, bondholders and other debt providers, we operate, invest in and expand our business both organically and through acquisition.
People and knowledge
The Board provides strategic leadership of the business. The passion, commitment and innovation of our employees across both land-based and digital operations creates our culture and makes William Hill one of the most trusted gambling brands.
Brand and reputation
Our 82-year-old brand is one of the most recognised and trusted in gambling. We invest primarily in regulated markets where the licensing of operators helps to encourage fair and open gambling, to protect vulnerable customers, to prevent underage gambling, to support sports integrity, to keep crime out of gambling and to enable investment in continually improving responsible gambling measures.
We invest in both clever thinking and the best technology to innovate and differentiate ourselves and the William Hill brand from our competitors’ offerings. We use our customer insight to continuously refine our products and services, and to improve the customer experience.
We work with all our stakeholders to build long-term relationships. We collaborate with customers, regulators, governments, sports bodies, suppliers and the wider gambling industry around the world to ensure we both comply with and increasingly lead the way in delivering a responsible gambling experience.
HOW OUR CUSTOMERS GAMBLE WITH US
Our different land-based and digital channels enable customers to access our products wherever and whenever they want to gamble, offering a more social experience in our LBOs or sports books or a quick and easy bet on their mobile devices.
Our customers primarily come to us through sports betting, where we build an anticipated margin into the offer price. We continuously evolve our betting product range to be relevant to our customers by providing betting opportunities they cannot find elsewhere.
Gaming is constantly available and extends the opportunity for customers to use our products in between betting events. We build a margin into our gaming products. Gaming outcomes are randomly generated and more frequent and so operate at a lower but more stable margin than sports betting.
HOW WE INVEST
Reinvesting cash flows
Our UK Retail operation is a mature, stable and highly cash-generative business. This enables us to reinvest in the faster growing areas of digital gambling and international expansion, supported by technology that differentiates our customer experience.
The digital gambling market is growing by around 10–15% in markets such as the UK and Australia1. By investing in marketing and technology, we continually build and reinforce the profile of the William Hill brand and differentiate our offering by using technology to deliver a product range and a user experience that stands out from our competitors’.
As regulations change around the world, opportunities are opening up for us to take our betting and gaming offering to a wider customer base. We invest primarily in licensed markets where established regulatory and tax structures give us longer-term visibility on potential revenues. We have established leading market positions in five major gambling markets.
Performance and outlook
In 2015, the Group has made substantial operational progress against our three strategic pillars of omni-channel, technology and international. In technology terms, Online now has the Trafalgar platform that allows us to deliver rapid and frequent innovations to customers, further differentiating our offering. An important part of our omni-channel strategy – our proprietary self-service betting terminal (SSBT) – has also been enabled by this platform.
Internationally, there are good signs of growth from William Hill Australia, which is now benefiting from our investment and reshaping to focus the business on the recreational customer base who are driving the structural growth of that market.
In profit terms, 2015 was always going to be a challenging year as the Group faced substantial additional gambling taxes in the UK. However, excluding these, Group operating profit grew 2%.
Looking ahead, we are well placed to grow in 2016 as a result of our progress in 2015. Retail remains a very resilient and highly cash generative business and this supports the Group’s continued investment in digital and international areas to drive further growth and shareholder value.
The omni-channel strategy will benefit from the roll-out of our proprietary SSBT in 2016, Online is focused on delivering a strong pipeline of new products and user experience improvements, Australia is showing encouraging signs of being very competitive in that attractive market and the US business continues to grow apace.
Major sporting events like the EURO 2016 football tournament in the summer give us great opportunities to deliver the best possible experience to our customers, particularly at a time of disruption in the industry with a number of large mergers currently happening. As one of the largest scale businesses in gambling, the Board is confident the Group is well placed to deliver on its growth strategy.
Regulation and our marketplace
Gambling takes many forms and varies from country to country. The industry is made up of government-run operations, licensed monopolies or open commercial markets. In some countries, there is an outright ban on gambling. The wide range of products available to consumers – including lotteries, sports betting, casino games, bingo and poker – are available in many different formats, from land-based clubs, pubs, casinos, betting shops and race tracks to online gambling.
Land-based activities remain the format of choice for most gambling customers across all the leading countries by gambling revenues. Online gambling first started in earnest in 1998 while mobile gambling has become more prominent in the last five years with the advent of smartphone and tablet technology.
In many countries, gambling regulations were originally designed with land-based operations in mind. With the advent of digital gambling overcoming physical borders, governments are moving to update their regulations to take account of online and mobile gambling.
This is creating opportunities for companies – such as William Hill – who have built a successful digital business. It is particularly an advantage for those who have become successful in the UK market as the competitive intensity in this liberalised market has driven high levels of innovation that are proving attractive in other markets.
Approximately 88% of Online’s revenues are generated from regulated markets where we can take a licence and do so profitably. As the legal picture is evolving, we have a clear legal and risk-assessed position on each of the markets from which we generate revenues.
An overview of our key markets can be found on pages 24-27 of our 2015 Annual Report & Accounts (5.9MB PDF).
Recently, the level of attention on our industry has increased substantially. This encompasses wide-ranging concerns, from the possible effects of the rapid growth in popularity of gaming machines over the last decade, to areas such as advertising, the effect of in-play betting on sports integrity, the industry’s support for the horse racing industry and localised concerns about the number of betting shops on the high street.
Leading operators have worked together and proactively – both as an industry and with the government, the regulator and various industry bodies – to address these concerns and to facilitate fact-based decision-making.
For more about our approach to responsible gambling and sustainability, visit our Responsibility section.