Flutter Entertainment PLC (FLUT) 2022 Q4 法說會逐字稿

Good morning. Thank you for joining Jonathan and I for our 2022 Preliminary Results Presentation. Today, I'll start with a brief overview of performance across the year and then layout why we believe Flutter is very well positioned to create shareholder value. Jonathan will then take you through the financials before I provide business update. We'll be holding a Q&A at 9:30, where we look forward to taking your questions.

Starting on Slide 4, 2022 saw strong top line growth with player volumes or AMPs, up 26%, driving revenue 22% higher. On a pro forma basis, adjusting for a full year of Sisal and Tombola, revenue was 14% ahead and AMPs 15% ahead. Our U.S. revenue and EBITDA loss were both at the better end of expectations even after new states of investments. While Group ex-U.S. EBITDA was within range despite customer-friendly results in December. Our performance in the U.S. was nothing short of exceptional, and our advantages are compounding. We had an incredible 50% share of the sports market in Q4, which is a 10 percentage point increase year-on-year, while the gaming improvements we are delivering, have seen us capture market share. Notwithstanding the losses in FOX Bet, we're profitable in Q2 and also in Q4, excluding investments in new state launches. We remain firmly on track with U.S. profitability for the full year 2023.

Outside of the U.S., we had good planned momentum in all divisions. Product and efficiency improvements in the UK&I had good execution of the World Cup delivered the strong Q4 and provide us with excellent momentum into 2023. In Australia, player volumes remain high. However, COVID frequency reversion and a very competitive market in H2 made for a challenging environment. Our International division delivered very good growth in several exciting markets and was boosted by the acquisition of Sisal. We are well set for what will be a transformational year for the group, as the U.S. turns to profitability, and we reach a growth inflection in our International business.

Before we go into the detail of 2022, I'd like to take some time today as we do at the Capital Markets Day in November, to remind people why we believe Flutter is very well positioned to deliver long-term value. I'll take each one of the points on Slide 5 in turn over the coming slides. Moving now to Slide 6, we have the right portfolio of brands to win in our local markets. FanDuel is the clear leader in the U.S. taking share as the market rapidly expands. The huge volume of customers we have acquired to date means the business is firmly on track to be profitable in 2023. Our ex-U.S. Group is a combination of highly profitable, high margin scale operators in mature markets and fast-growth businesses in a number of very exciting markets. Our simplified view of the ex-U.S. Group is one that has delivered consistently good revenue growth with strong conversion of profits into cash. Compound annual revenue growth of 8% pro forma over the last 3 years, which obviously, excludes our highest growth market in the U.S., demonstrates our ability through scale to grow through regulation.

The global betting and gaming market opportunity is significant. We believe the U.S. market will grow to over $40 billion by 2030. While outside of the U.S., the opportunity is huge. The market is currently worth over GBP 260 billion and projected to continue growing at high single digits. And online penetration levels remain very low at 30% compared to more mature markets, providing a long runway for growth. Further scale and diversification are unparalleled. We have clear #1 positions in the largest global markets, including the U.S., the U.K. and Ireland, Australia and Italy. Our scale advantage creates a virtuous circle, where the more revenue we generate, the more we can invest in our products, marketing and generosity in turn driving higher revenue growth. Our geographic diversification provides us with access to high-growth markets alongside the resilience to withstand regulatory change in local markets. Our broad product suite means we appeal to a very wide range of customers and facilitates high levels of cross-sell across our player base.

On to Slide 9, the Flutter Edge encapsulates our group's distinctive global competitive advantage. From this, our brands can avail of unparalleled expertise as and when they needed. It represents a symbiotic relationship between divisions, with all contributing to and benefiting from it. The sharing of talent, technology and product expertise and the provision of capital gives our brands advantages that our competitors can't replicate. It means our brands can operate with the scale of a leader through the mindset of a challenger.

On Slide 10, we've outlined how we delivered against our refreshed strategy over the last 12 months. I won't go through all of the points here as these are all covered in the rest of the presentation, but the connection between delivering on these objectives and financial performance is very clear. For example, in the U.S., we've improved our gaming proposition, and this is translating into market share gains. Similarly, in the UK&I, we've released over 100 product improvements across our combined brands, providing a boost to momentum in H2 with online revenues of 14% higher in Q4.

In Q4, 97% of the group's revenue came from regulated or regulating markets, where our International division is delivering strong growth in our Consolidate and Invest markets. We are also delivering against our Positive Impact Plan. We've seen an 8 percentage point increase in the proportion of our customers using the safer gambling tool to over 40%. This is a fantastic start in what we believe should be an industry standard target with regards to safer gambling. We now have 33% of women in leadership roles with plans in place to improve this. And in 2022, we improved the lives of over 440,000 people within the communities we operate and work in and to Do More pillar. Our work on safer gambling is not confined to the use of Play Well tools.

Our Slide 12 outlines each of our divisions have been focused on making important changes for our customers. I won't go through the detail here, but I just want to highlight the strategic approach we take to safer gambling and how it is embedded throughout the entire organization. We have a tailored approach in our local markets based on the regulatory framework that exists there, while also leveraging the shared learnings and expertise from across the group. Getting this right for our customers is a huge focus for the group and is crucial in protecting the sustainability of our business. Throughout 2022, we've invested over GBP 60 million in safer gambling, including expanding our teams, training our colleagues and integrating safer gambling messaging into our marketing.

And with that, I'll hand you over to Jonathan, who for the last time, will take you through the financials.

Thanks, Peter, and good morning, everyone. We have a lot to get through, so let's get started. So moving to Slide 14, we have delivered a really strong set of financial and operational results for 2022. We have added materially to our scale, growing and extending our leadership in the U.S. and grown AMPs across our 3 non-U.S. divisions.

Okay. So starting with the U.S., we have delivered an exceptional performance with revenue of GBP 2.6 billion, 67% higher than 2021. On a constant currency basis, the U.S. EBITDA loss was marginally lower in 2022 compared to the prior year. And within this loss, we had a profitable quarter in Q2 and again in Q4, excluding the cost of new state launches in Maryland and Ohio. In the Group ex-U.S. revenue was 7% higher or flat on a pro forma basis. We achieved strong organic growth, but profitability was impacted by the significant previously flagged headwinds.

At a combined group level, we significantly increased AMPs achieving growth of 26%, which resulted in revenue being up by 22%. Our cash conversion of operating profit to free cash flow was strong, demonstrating the cash generative nature of the group. And we ended the period with net debt of GBP 4.6 billion. Year-on-year, the increase of GBP 2 billion included the acquisitions of Sisal and Tombola as well as the buyout of Adjarabet minorities.

Turning to Slide 15 and the statutory income statement, both reported revenue and reported EBITDA increased by 27%, benefiting from the Sisal and Tombola acquisitions. Reported EBITDA includes GBP 127 million of separately disclosed items, which related to the integration and restructuring costs primarily associated with the TSG merger. A further GBP 608 million of separately disclosed items are included within the loss before tax, which relate to the amortization of acquired intangibles. These increased in 2022 over the prior year due to the Sisal and Tombola acquisitions. Interest expense was 5% lower with the annualization benefit of the prior year refinancing being partly offset by higher debt levels and increased interest rates in H2. And the tax charge is lower than the prior year due to a one-off deferred tax charge of GBP 104 million in 2021 relating to the announced U.K. corporation tax increase in 2023. This resulted in a statutory loss after tax of GBP 305 million.

On Slide 16, we show AMP and revenue performance compared with the prior year. It is critically important that we drive growth in recreational customers across the group to build a sustainable business. We clearly did this successfully in 2022. In the U.S., strong customer acquisition in new and existing states drove AMP growth of 49% and revenue growth of 67%. Revenue from sportsbook more than doubled. For Group ex-U.S., AMPs and revenue were 20% and 7% higher, respectively. In the UK&I AMP growth was 18% or 4% on a pro forma basis. Revenue was 4% higher, benefiting from the addition of Tombola, a fully opened retail estate and good momentum in quarter 4. This was offset by the reversion of player activity to pre-COVID levels and the annualization of our proactive safer gambling measures introduced through 2021.

In Australia, we delivered good AMP growth. However, revenues were 6% lower as a result of our H2 performance, which was 14% lower. This was impacted by 2 key factors. Firstly, we saw a major reduction in H2 player activity back towards pre-COVID levels. Secondly, there was a more competitive environment in which we aggressively competed. The fact that we grew AMPs across H2 and into 2023 makes us confident that the aggression we showed was the right course of action. In International, pro forma AMPs increased by 13%, leading to revenue being 7% higher. We saw particularly strong growth in Italy and India.

Now looking at the U.S. performance in more detail, the team have delivered exceptional growth. Revenue was 67% higher and at the top end of market expectations at $3.2 billion, with sportsbook growth of 115%. This growth comes both from the 5 new states added in 2022 and also existing states. Those states which launched prior to 2021, delivered a really pleasing 42% online sportsbook revenue growth. Sales and marketing increased to GBP 964 million. This was a decline of 11 percentage points relative to revenue as we leveraged national advertising economies, coupled with our maturing state profile. Other operating cost growth was 20 percentage points lower than revenue growth. The shape of the U.S. income statement is changing massively. The trajectory of EBITDA margin is very clear as we see the significant benefits of operating leverage. The 8 percentage point improvement provides us confidence that we will achieve a positive EBITDA in 2023.

Turning to Slide 18, we take a closer look at the U.S. online sportsbook momentum, further underpinning our confidence in 2023. This is an updated slide presented at our Capital Markets Day in November in New York. This slide demonstrates the progression of cohorts acquired from launch in 2018 to date. As you can see, moving from year-to-year, each cohort swings from a contribution loss in year 1 to a contribution profit in year 2. For each new larger cohort of customers that we acquire, the investment is deeper, but the corresponding second year profit is higher.

This slide reflects final numbers for 2022, with total contribution generated during the year by cohorts acquired up to 2021 of $616 million. Crucially, this contribution is greater than the 2022 reinvestment of $535 million that drove the acquisition of a further 2.9 million customers. We expect the trends to continue. When combined with the operating leverage benefit, we are confident that we will deliver a positive EBITDA in 2023 and significant value beyond transforming the earnings profile of the group in the future. We have also listened to feedback and included a reconciliation of the sportsbook revenues into the overall Flutter U.S. performance in the appendix.

On Slide 19, we have laid out the year-on-year EBITDA bridge for Group ex-U.S. Moving from left to right, we make a number of adjustments to rebase EBITDA to give a clearer view on underlying performance. Firstly, we adjust the prior year for the Sisal and Tombola acquisitions and adjust for FX. Secondly, we adjust for the previously guided impact of safer gambling measures in the UK&I, international regulatory changes and the Australian point of consumption tax increases. This leads to a rebased 2021 comparative of GBP 1.35 billion. I've already covered the main revenue drivers on Slide 16, and here, I will talk to underlying EBITDA.

In UK&I, underlying EBITDA grew GBP 31 million, with a GBP 50 million positive swing from retail being open for all of 2022. In UK&I online, underlying EBITDA growth of around GBP 60 million in H2 was more than offset by the unwind of the COVID frequency benefit in H1 and the safer gambling headwinds. In Australia, the first half benefited from a COVID tailwind, which reduced significantly in H2 at the same time as a major increase in competitive intensity, resulting in underlying EBITDA of GBP 37 million lower. International revenue growth is translating into profit growth, with underlying EBITDA GBP 83 million ahead, including Sisal, where EBITDA was 22% higher. On a pro forma basis, the adjusted EBITDA for Group ex-U.S. was GBP 1.43 billion, representing underlying growth of 6% for the year.

Moving to Slide 20, we generated adjusted free cash flow of GBP 628 million. This is in line with 2021, with the increases in group EBITDA and working capital benefits offsetting higher CapEx and tax costs. Cash flow conversion was strong. Comparing operating profit to pre-tax adjusted free cash flow, we converted profit into cash at 117%. I will just highlight a few items here. We paid higher corporation tax due to the changing geographic mix of our earnings. Interest payments were higher, reflecting the Sisal acquisition and the increase in cost of debt from H2. And we successfully completed material M&A during the year. This led to outflows of GBP 2.2 billion from the acquisitions of Tombola in January and Sisal during August, combined with the buyout of Adjarabet minorities. We, therefore, finished the year with net debt of GBP 4.6 billion.

On Slide 21, we have laid out our gross to net debt position. On a pro forma basis for Sisal and Tombola, our leverage ratio at the end of the year was 3.9x or 3.2x if you adjust for U.S. investment losses. As the U.S. becomes EBITDA positive in 2023, with further growth expected thereafter, our cash flow generation and leverage profile will be transformed, leaving us in a very strong balance sheet position. We remain committed to our medium-term target of 1x to 2x leverage, and the Board will review the group's dividend policy once leverage is within the targeted range.

On to financial guidance and outlook for this year on Slide 22, our current trading is in line with expectations. The U.S. is delivering strong growth in existing states and the newly launched states of Maryland and Ohio have been very pleasing. In Group ex-U.S., the strong momentum in UK&I and International is offsetting lower trading activity in Australia. Our interest guidance remains the same as at quarter 3 with an expected net cash interest cost of GBP 280 million. We would expect this to fall significantly in the following year as we rapidly de-lever. Our Group ex-U.S. corporate tax rate is expected to be 25% to 27%, reflecting a shift in profit mix to higher tax countries. Our U.S. tax rate is likely to benefit from a material deferred tax credit as we turned profitable.

CapEx is expected to increase to GBP 480 million to GBP 500 million, a GBP 34 million pro forma increase year-on-year, reflecting ongoing investment in U.S. product and group investment in areas such as our casino studios and our shared platforms. Depreciation is expected to be approximately $480 million, a pro forma increase of around GBP 45 million year-on-year. Finally, I wanted to remind people that the expected profit phasing in our U.S. business will be similar to 2022, profitable in quarter 2 and significantly profitable in Q4.

As Peter mentioned, this is my final set of results as Flutter CFO before I hand over to Paul Edgecliffe-Johnson later this month. I was reflecting back in my time as CFO. I joined Paddy Power Betfair back in October 2018, a year when the group's revenues were just GBP 1.9 billion. We have pro forma U.S. revenues of around $300 million, having acquired FanDuel in July 2018. Rolling forward to 2022 through a mixture of organic growth, the merger with TSG and acquisitions, including Sisal and Adjarabet, we have massively diversified the group. We have increased revenues fourfold to GBP 7.7 billion.

Adjusted EBITDA has increased from GBP 451 million to GBP 1.05 billion with 2022 still experiencing material U.S. investment losses. Over this period, we have hugely increased the sustainability of both the revenues and the profits of the group and built strong growth positions. Looking forward, the group is at another transformational point, of which the significant investments that we have made in the U.S. across these last 5 years will become the engine, transforming the financial ship and trajectory of the group. I'm incredibly proud of what Flutter has achieved and privilege to being CFO over this period. I now look forward with excitement to my next chapter with Flutter as COO.

I'll now hand you back to Peter to talk through our business update.

Thanks, Jonathan, and now on to the U.S., where we continue to be thrilled with the exceptional performance we're seeing. Slide 24 reiterates the winning formula that Amy and her team presented at our Capital Markets Day, being the FanDuel Advantage. While we are acquiring customers more efficiently, retaining customers for longer and growing customer value. This combines with the Flutter Edge, where FanDuel is leveraging the power of the wider Flutter group. We have a clear strategy to extend our clear unborn position in the U.S. sportsbook, grow our iGaming proposition and strengthen and leverage the flywheel. Our scale advantage is compounding. And the winning formula laid out on this slide underpins our conviction that FanDuel will maintain its clear #1 position in the market.

Turning to Slide 25, you can see the outputs of this strategy in action. I think this slide speaks to itself. It's a simple but striking message. We delivered a 10 percentage point gain in sports market share in the last 12 months to a phenomenal 50% of GGR in Q4. This increases to 57% GGR market share in those states that provide this data. This meant Flutter at 40% of the total U.S. sports betting and iGaming market in Q4, a truly exceptional achievement. Our 2 most recent state launches in Maryland and Ohio have been our most successful to date. The chart in the middle of the slide shows that the rate of total adult population penetration continues to accelerate with each state we launch. In both states, FanDuel exceeded 6% penetration since launch with well over 50% market share.

While undoubtedly, there is a market penetration curve benefit as sports betting becomes more mainstream. Our new state playbook is delivering outstanding returns. Importantly, the player economics justify this investment with paybacks well within 12 months, embedding value to deliver future growth. This means we are #1 in virtually all of the states in which we operate, as shown on Slide 27. This includes 3 new gold medal positions in Maryland, Ohio and Kansas. One of our key strategic pillars in the U.S. is to grow our iGaming position. We outlined a clear plan to achieve this, and the team have been doing a great job working to deliver against it.

We are increasing our focus on iGaming direct customers, leveraging an improved product proposition and refreshed FanDuel casino strategy. We launched our FanDuel reward machine in Q3, which has been driving meaningful improvements in customer player days, which in Q4 were 1.5x the same quarter last year. Our month-on-month retention rates are also strong, up 25% during Q4 versus the prior year. This has delivered really encouraging iGaming AMP growth in Q4 of 63% and positive momentum in our market share with a 3 percentage point increase in our FanDuel casino market share year-on-year. All of this is really encouraging as we move into 2023. Our strategy is working and with more to come, we are confident our future plans will deliver meaningful future growth.

Finally, on Slide 29, to conclude on the U.S., on the left is a reminder of the flywheel graphic. We cannot emphasize enough the importance of scale and its related flywheel benefits plays in driving success within our business. The flywheel underpins the cohort progression and route to profitability that Jonathan has talked to you about on Slide 18, possibly my favorite slide in the pack. It also enables the efficiencies in sales and marketing and our operating costs will deliver as our U.S. business grows. This ensures that we are consistently the #1 player by a considerable distance.

On the right-hand side of this slide, we show that our revenue in 2022 was 1.4x that of our nearest competitor or $900 million higher. We delivered this while incurring a significantly smaller investment loss during the year when looked at on a like-for-like basis and adjusting for share-based compensation. The cohort progression that Jonathan took you through demonstrates the sheer scale of the profit potential in the U.S. We've already acquired over 1 million new customers so far this year and are well on track to deliver a full year EBITDA profit in 2023. This will transform the earnings profile of the overall group in this year and beyond.

Turning now to our ex U.S. businesses and starting on Slide 30. This slide shows how we've built significant momentum in our UK&I online businesses throughout the year. In gaming, we're seeing consistent strong growth in player volumes through 2022, driven by our steady pipeline of product innovation. Our brands have iterated their free-to-play propositions to drive strong retention rates, while also providing branded gaming content. The chart on the left shows the underlying gaming growth in the business, particularly evident after we lapped the unwind of the COVID frequency benefits and proactive safer gambling changes in H1. On the sports side, the World Cup in Q4 provides an excellent opportunity to engage a broad recreational player base. Sports AMPs were 23% higher in Q4 and high levels of retention mean that nearly 80% of World Cup actives placed a bet in January this year. At last year's results, I highlighted how we needed to sharpen our product in the UK&I.

Product throughput in 2022 has been very pleasing with over 100 new product initiatives released, but just a few examples shown on Slide 31. We saw strong engagement with our newly released Bet Builder products, where 71% of players placed a Bet Builder during the World Cup. We have also further integrated the UK&I business. We moderated our marketing spend given lower top line growth but also improve the efficiency of our spend, resulting in a 100 basis point reduction in sales and marketing as a percentage of revenue. Integration savings helped offset the inflationary cost pressures. When combined with several one-off cost benefits, this resulted in pro forma other operating costs being 10% lower.

Moving to Australia on Slide 32, the team in Sportsbet has done a really good job of growing player volumes during the year, with AMPs increasing 8% versus 2021 to a record level of 1.3 million in Q4. The second half of the year was a more challenging environment in Australia. It's important to remember the market context of Sportsbet during this period. As the leading brand in the market, Sportsbet grew considerably faster than the rest of the market during 2019 to '21 when COVID lockdowns were in place. Our society reopened in 2022, particularly in the second half of the year, we saw a reversion of customer engagement and wallet share as customers return to retail and began spending their entertainment wallet and travel and other discretionary entertainment.

For Sportsbet, which had a disproportionate gain in share throughout the COVID period, this has led to a corresponding disproportionate impact from the unwind. In addition, competitive intensity increased significantly during H2 with new competitor launches and existing players trying to scale up prior to tax increases. We leaned into this intensity and increased our spend ahead of the tax increases and the World Cup, ensuring we successfully defended our AMP base against some extremely aggressive competitor offers. The retention of these AMPs positions us well in 2023. Our focus on product innovation has always been a key driver of our leadership position in the Australian market. This has delivered the capacity to invest in promotional generosity, helping deliver a 3 percentage point increase in net revenue margin since 2019. We intend to maintain our product leadership in 2023 and deliver further innovation to ensure we regain wallet share and return to growth.

We stepped up investments in products and technology resource in H2 to help accelerate our rollout of customer-facing product features. We have plans to further enhance our Bet With Mates social betting product due to launch in the coming weeks with other product rollouts through the start of the AFL and NRL season. We continue to focus on delivering all of this growth sustainably in line with our Play Well strategy and are confident that the plans we have in place are the right ones to capitalize on our large AMP base and deliver future growth.

Moving to International on Slide 34, we believe our International division is now at a growth inflection point, with the business set to annualize the major known regulatory headwinds in March this year. The division is now in a more sustainable footing with no unregulated market larger than 0.2% of group revenues. We will focus investments on our consolidated investment markets, which now make up 76% of the revenue in the division on a pro forma basis grew by 22% in the year. As Jonathan outlined, this includes exceptional growth in Italy, India and Turkey. The Optimize and Maintain markets declined 8%, excluding the guided regulatory headwinds and include the unwind of the prior year COVID engagement benefits.

We completed the acquisition of Sisal in August. I'd like to take some time to talk through the Sisal business to help demonstrate just what a fantastic addition it is to the Flutter group. Sisal is the #1 operator in Italy and has several significant competitive advantages. Sisal's omnichannel presence in the market with advertising restrictions is driving high brand awareness versus digital-only brands. We have a 9-year lottery concession in Italy, delivering very high customer volumes and cross-sell opportunities and attractive opportunities for growth with monopoly positions in Turkey, Morocco and Tunisia. Sisal has been winning share in Italy due to a strong cross-sell from its retail and lottery business, product leadership in sports and improvements to its gaming proposition across 2022.

The business has performed very strongly since we announced the acquisition with revenue growth of 32% and EBITDA growth of 22% during 2022 to GBP 247 million. Against a purchase price of GBP 1.62 billion, this represents an acquisition multiple of 6.6x. Italy is the largest gambling market in Europe with a TAM of GBP 17.6 billion. The majority of the Italian market is retail based, with just 19% of the market currently online, despite 28% compound growth in the online market over the last 3 years, having benefited from accelerated channel shift from retail to online during COVID. Sisal is taking share online and it has captured 140 basis points of share over the last 12 months, taking share to 13.4% and Flutter combined share to nearly 22%.

Turning to Slide 37, Sisal has a huge retail customer base of 9.5 million players, providing for a great opportunity to cross-sell online. Gross revenue from a retail cross-sell customer is typically 2.5x that of an online acquired customer. Also, revenue drops to the bottom line at a higher rate, given respective EBITDA margins for the retail and online businesses. Sisal is maximizing this opportunity by providing seamless online experiences for retail migrators and ensuring that they are rewarded for all their play in respect to the channel they choose to play on. This opportunity also extends to Sisal's lottery offering, where over 1 million lottery players checked their results weekly via the Sisal lottery app.

Online luxury customers are offered incremental chances to win and the opportunity to try some gaming content. Sisal's performance across H2 was boosted by a record Superenalotto jackpot, that has been rolling over since May 2021, eventually reaching EUR371 million jackpot. The increasing jackpot drove higher levels of customer engagement, cross-sell and overall brand profile. It was great to see the Jackpot finally being won in February by over 90 individual players. Sisal has the leading online sports proposition with innovative product features such as Duo, which provides for a bet selection to continue even when a selected player is substituted. Sisal's social betting experience, Tipster is market-leading and provides the wider group with an opportunity to learn from its success.

The benefits of the Flutter Edge are also clearly evident. Following regulatory approval for cash out, Sisal is able to leverage Flutter capabilities to rapidly deploy a cash out product and be first to market. Sisal now have access to Flutter's risk and trading capabilities, delivering part of our revenue synergy opportunity. And Sisal also made significant improvements to its gaming offering in 2022 by integrating more content in its gaming app, enhancing the customer experience of better reward mechanics and proprietary gaming content from the Sisal gaming studio Playnext. This helped drive online gaming AMPs, 31% higher year-on-year. Sisal has been very successful in winning lottery and sports betting tenders in other exciting regulated markets, namely Turkey, Morocco and Tunisia. Sisal's expansion to these countries also demonstrates how Flutter expertise can be used by the group as a beachhead into new countries. This table lays out our offering in those countries, which through our monopoly positions, provides the group with some fantastic growth opportunities.

Before I conclude, I want to highlight the momentum we had in the overall group in Q4 that leaves us well positioned as we enter 2023. FanDuel is going from strength to strength as our advantages compound with each new state, and we are extending our #1 position in the market. Outside of the U.S., the actions we've taken to address underperformance in the UK&I at the end of 2021 have delivered very promising results. In Australia, our record player base provides a good platform into 2023. While in International, we believe we are at a growth inflection point.

To conclude, our U.S. performance in 2022 was outstanding and continues to exceed all expectations. In the ex-U.S. Group, our diversified product and geographic portfolio means we have continued opportunities for growth. 2023 is off to a pleasing start with our combined U.S. business on track to deliver full year profitability in 2023, the group earnings profile is set to be transformed. We look forward to delivering future growth and progressing further against Flutter's strategic priorities in the coming year.

And finally, that leads me to personally thank Jonathan for his outstanding contribution over nearly 5 years as CFO, during which the group has been transformed and is now positioned incredibly well. It's been quite a journey, and Jonathan stewardship, advice and overall input has been invaluable. We are delighted that Jonathan remains with us in his new role as Chief Operating Officer, and I also look forward to Paul Edgecliffe-Johnson, joining as CFO, who many of you will already know in the coming weeks.

We look forward to taking your questions on our call at 9:30, the details of which are available on our website.