Priorities

Following the Merger of Paddy Power plc and Betfair Group plc, we are working on three key initiatives to unlock the potential of the combined business:

1. Combining the best assets and capabilities of each legacy business

In bringing two strong operators together we have been able to select the best people, assets and practices from each operator to enhance our overall competitive positioning. We are focused on creating a joint operation that combines the best assets of each individual legacy business.

Early work has involved sharing popular product features between brands, using two sets of in-house marketing technology, conducting co-ordinated bidding for media assets, and pooling our trading and customer service teams to give a better customer experience across both brands.

Longer-term, we are combining our two existing technology estates into a single, flexible, scalable platform that provides a single customer platform, supporting growth across all brands.

2. Optimising our brand positioning in the UK and Ireland

We are seeking to maximise growth in the UK and Ireland by optimising the positioning of our Paddy Power and Betfair brands. Our research shows that Paddy Power and Betfair currently appeal to customers in different areas of the market, with limited overlap between customer bases. We believe that by focussing each brand more tightly on its key audience we can both improve the customer experience and increase efficiency. We also believe this sharpened focus will give us a better platform to address some areas of the market where we currently under-index.

We have therefore started to adopt more targeted approach to messaging and customer proposition on each brand. Betfair will focus on the segment of customers whose motivations to bet are money-centric, offering a strong value proposition on both the Exchange and Sportsbook. Paddy Power will focus on being the brand its customers love and its proposition will be entertainment-led, offering headline promotions and offers.

3. Capitalising on our enhanced scale

The fixed-cost nature of our industry means that larger operators can operate more efficiently and subsequently invest more money into customer-facing areas such as marketing and product. This becomes a virtuous circle that drives greater revenues, operating leverage and future investment.

Since the Merger we have sought to capitalise on the enhanced scale of the business. We have combined marketing budgets (investing approximately £300m in 2016) and started to share assets across brands, enabling us to acquire, and then efficiently utilise, the most attractive marketing assets. We have a significant presence across Sky Sports, BT Sport and ITV, our Betfair brand recently signed a three-year partnership with FC Barcelona and Sportsbet signed a five-year sponsorship deal with the NRL in Australia.

Scale also carries benefits for product development, with the combined business retaining more capability than either legacy business had on its own. This means we can roll out better products to existing markets and enter more new markets at the same time. Our scale spreads development spend across a larger customer base, driving efficient returns.