Flutter Entertainment - Q4 2023 TU

Transcript

Operator (participant)

Good morning, and welcome to the Flutter Q4 trading update, hosted by CEO Peter Jackson and CFO Paul Edgecliffe-Johnson. Please note, this conference is being recorded, and for the duration of the call, your lines will be on listen only. However, you will have the opportunity to ask questions. This can be done by pressing star one on your telephone keypad to register your question. If you require assistance at any point, please press star zero, and you'll be connected to an operator. I will now hand over to your host, Peter Jackson, to begin today's conference.

Peter Jackson (CEO)

Thank you, Jess. Good morning, everyone, and thank you for joining our Q4 trading update call. With me this morning is Paul Edgecliffe-Johnson, our CFO. Hopefully, you'll have had a chance to review our trading statement this morning. As we move towards our U.S. listing, we will, of course, be starting these calls with standard disclaimers. While we're not U.S. listed just yet, we do have a couple of upfront comments to make today. Ahead of our expected U.S. listing on the New York Stock Exchange on the 29th of January, we are still in an open application process with the SEC. This precludes us from being able to directly reference EBITDA, either in the statement or on the call today. Today's release is a brief trading update under IFRS.

Our full year 2023 results will be reported on 26 of March under U.S. GAAP and in U.S. dollars. We'll also provide 2024 guidance at this time. Our reconciliation of our historic results between IFRS and U.S. GAAP will be made available before our full year results, to help you understand the basis of our reporting going forward. Now, moving on to Q4. We were very pleased with the underlying performance in the group, as the Flutter strategy delivered strong AMP growth of 12% and revenue growth of 15%. In the U.S., FanDuel retained its clear number one sportsbook position with a 43% GGR share and a 51% NGR share. FanDuel Casino continued to go from strength to strength as we delivered on the strategy to improve our gaming proposition. It took share in Q4, accounting for 26% of the market.

The underlying momentum in the U.S. business remains very strong. AMPs were up 33%, with sportsbook staking up 53% and iGaming up 49%. Revenue growth of 26% reflected the well-publicized impact of very customer-friendly sports results, amounting to $343 million, largely on NFL games in November, compared to the bookmaker-friendly results in Q4 of 2022. The nature of our business means that there are periods where the outcomes swing in our customers' favor, as we saw in the U.S. in November. This can cause variability when looking at shorter time periods. But reassuringly, if we look across all of 2023, our actual margin was just 50 basis points below expectations, and in 2022, it was 10 basis points ahead.

Taking into account the impact of sports results, we anticipate the U.S. revenue will be $225 million, or GBP 147 million, lower than previous guidance, and that this variance will drop through to adjusted EBITDA at approximately 35%. Outside of the U.S., Q4 trading was in line with our expectations, leading to an anticipated full year performance in line with the guidance provided at Q3. This ex-U.S. performance was driven by very strong momentum in the U.K. and Ireland, supported by recent product enhancements, as well as international growth, driven by good performance in our consolidate and invest markets. We completed our acquisition of MaxBet at the start of January, adding another local hero to the Flutter portfolio.

Overall, we look forward to 2024, and the strong momentum we are taking to the start of the year gives us confidence in our outlook for the year ahead. We are very excited to add our U.S. listing on the 29th, subject to SEC clearance. The additional listing will enable us to access deeper capital markets, as well as making Flutter more accessible to U.S. investors, and marks a new chapter in the history of the Flutter Group. With that, I'll turn it over to Jess for Q&A. This is a brief trading update, and therefore, we only have 30 minutes for questions on the trading update itself. We're unlikely to get to everyone as a result, and the IR team will be on hand to help with any follow-ups.

Operator (participant)

If you would like to ask a question, please press star one on your telephone keypad, and please ensure your line is unmuted locally, as you'll be advised when to ask your question. The first question comes from the line of Ed Young from Morgan Stanley. Please go ahead.

Ed Young (Equity Research Analyst)

Good morning. Two questions on the U.S., please. The first one is, your expected margins were up 200 basis points, quarter-on-quarter to 13.5%. Could you talk through the drivers of that change? It's well above your 12% 2025 gross win margin target. Should we think about that kind of 13.5% level being achievable in Q1 or in 2024 generally? And if not, why not? And then the second question is, your 35% drop through you referenced is quite a low number for hold-related revenue shortfall. Can you just sort of remind us and talk through what kind of flexibility you have in the business around investments? What kind of mitigations you made in response to the November results?

So if there is anything you've done that in any way sort of impacts the revenue or profit potential of the U.S. business heading into 2024. Thanks.

Paul Edgecliffe-Johnson (CFO)

Thanks, Ed. And yes, look, we were very pleased with the results overall. And we're really pleased to see the expected margin up by 220 basis points. And we've been growing over the years, our expected margin, and that's the capabilities that we have in risk and trading, the very strong market share that we have in,

... the parlay product, which we are, we're the most famous for, and that does have a high margin for us. Q4 and Q1 are the biggest sports quarters, as you know, and they're biggest in the sports that, you know, we are biggest in, so they are our best quarters from a margin perspective. It won't be a performance that we can replicate every quarter, certainly not at the moment. And we'll have to see what happens in the first quarter. We can't talk about 2024, right now, as Peter referenced. But very pleased with that, and doesn't mean that over time, we can't get there. We talked at the Capital Markets Day as to what our margin targets were, and we are beyond that now.

And it's something we will continue to push. But, as I say, very pleased with that 13.5. In terms of the drop-through, we always have a few levers to pull, and we can think about how much we want to invest back into the business. The customers did very well in November, as Peter referenced. And that's sort of an element of generosity, so they have money in their pockets. Perhaps, had we not seen that, might we have spent a little bit more? Perhaps, you know, we always have to take a view on that, as you would expect. But we're really pleased with the results overall.

Peter Jackson (CEO)

And I mean, I think the other point around investment we're making in the business, is making sure that we have the right size of infrastructure for the business that we're going to become. You know, you can see the level of growth we're exhibiting in the States. We don't see that slowing down anytime soon, and we think it's important to continue to invest in, you know, the infrastructure that supports, you know, the scale business that we are, and indeed are becoming.

Paul Edgecliffe-Johnson (CFO)

Thanks, Ed.

Operator (participant)

The next question comes from the line of Clark Lampen from BTIG. Please go ahead.

Clark Lampen (Managing Director and Digital Gaming Analyst)

Thanks. I've got two on the U.S. also. Peter, I guess as we think about, you know, a sort of fairly strong underlying exit rate of growth for the U.S. business, in 2023, and if we were to juxtapose that, I guess, against the sort of medium-term U.S. outlook that you guys have provided previously, I'm curious whether it's fair for us to conclude that the underlying performance in the back half of the year has been stronger than you were expecting, or are there headwinds to growth that you might sort of remind us of here?

And then, Paul, second question, sort of as we think about that same sort of reference point with the medium-term U.S. outlook, could you remind us what's baked in, I guess, at least directionally for the major KPIs, like gross win margin, market share, and the promo rates? Thanks.

Peter Jackson (CEO)

Morning, Clark, and I have to say, it's always admirable when you get up in the middle of the night to join these calls. So, thank you. Well, look, I think we've obviously, we're very pleased with the performance that we saw in Q4. It's worth remembering that, you know, our business from a sports perspective, you know, has a degree of seasonality. You know, Q4 and Q1 are always going to be the busiest periods for us. And actually, you know, even within Q4, there's that period where, you know, there's a strong push at the beginning of the football season to make sure we sort of reactivate and re-engage customers.

I think from my perspective, what I look at is the level of AMP engagement that we had, you know, through the back end of the year, you know, 4 million customers on the platform. Also seeing, you know, very strong momentum in casino as well, as we execute on our strategy, to move ahead of the pack from a product perspective, and hope to see further gains in that area as well. So I think, you know, the business is trading well. You know, Q4 was a good reminder for us that margins can be both, you know, or sports results can be both positive, and negative.

It was also a quarter where there was lots of competitive intensity as well, but I think we showed the strength of our brand, our product, and the customer engagement that we had to finish the year very well. You know, it all goes well ahead for the future.

Paul Edgecliffe-Johnson (CFO)

And look, in terms of the future, Clark, and the framework that we've set out before, and how the numbers translate through, it is all translating through very, very much in line with the framework. We're not talking about the 2024 guidance today. That'll come in March, so we'll put out our full year numbers in full on the 26th, and we are restricted, as Peter said, as to what we can say today. But yeah, we're very confident in the framework. We've seen really good exit momentum, and we're very confident in the business. Thank you, Clark.

Operator (participant)

The next question comes from the line of Paul Ruddy from Davy. Please go ahead.

Paul Ruddy (Gaming and Leisure Analyst)

Hey, good morning, Peter and Paul. Just two quick ones. Firstly, it's just on the November win margin. Do you think, get any sense that there's kind of any inherent higher level of volatility in the win margin, owing to the fact that you have a structurally higher margin, i.e., i.e., kind of more parlay or lottery-type products? Or was November just that, kind of a one-off type event? And the second one then, just really quickly, is just on iCasino share. It looks particularly strong. Is that boosted in Q4 by your cross-sell from sports being... Given it's the strongest quarter from a sports perspective, or is it more to do with product enhancements? Any kind of color around that will be helpful. Thank you.

Peter Jackson (CEO)

Hi, Paul. Why don't I talk to you on the casino piece and Paul can come back to you on the volatility around the November margins? Look, I think, you know, if you look at the gains we've captured, you know, clearly a lot of points of share growth year-over-year, we believe a lot of that has actually come from the customers who are solely gaming customers, rather than cross-sell. We've always been very strong in the cross-sell sphere, you know, 'cause that's, you know, obviously where the sports business has given us a leg up.

But the product enhancements that we've made, the changes we've made to the, the product, the branding, the positioning, the daily free-to-play mechanics, the titles we have available on the platform, you know, contribute to really enhancing the quality of the product for those soloists, iGaming customers. And that's, that's where we've seen, the growth come through. And I think, you know, we've been, you know, taking share from some of the, you know, pure play, effectively, casino businesses in, in, in that area.

Paul Edgecliffe-Johnson (CFO)

And look, in terms of the win margin and the variability that we could see there, the way I look at it is that we are taking a very high market share of the product that our customers like most, and where the biggest growth is, and where actually the highest margin is for us, and so that's incredibly good news for us. It does mean that when you see some unusual results, that that'll have an unusual outcome for us. But across the year, taking significant market share is gonna be very valuable for us. If you look at the biggest game for us back in at the end of November, you know, with the Cowboys and the Seahawks, that there were some unusual outcomes there.

But that was great for customers who bet on that and really drives their interest, and so all goes very well for the future.

Paul Ruddy (Gaming and Leisure Analyst)

Really helpful. Thank you.

Operator (participant)

The next question comes from the line of Ryan Sigdahl from Craig-Hallum Capital Group. Please go ahead.

Ryan Sigdahl (Senior Research Analyst)

Hey, Paul, Peter. Good day, gentlemen. Curious on Brazil, what the strategy is going forward there, with new legislation. Is it, you know, go with established brands like Betfair, where you already have a toehold, or is it the local hero strategy that you've done in many other markets? And then, secondly, just want to stay on the iGaming. A lot of momentum there, and I think it's often an underappreciated business for how strong and impressive of results you have, relative to just how good you are at sports. But any additional product innovation in the pipeline or pockets of targeted iCasino first players, that you think you can drive further share gains there? Thanks.

Peter Jackson (CEO)

Well, morning, Ryan. Let me very briefly just deal with those two. I mean, I think from a Brazilian perspective, we've been very pleased with the, you know, the performance of the, you know, the Betfair and PokerStars brands in the local market, and, you know, look, it's been some time coming, but we hope at some point the regulation will be signed in, in Brazil. If you look at our approach to, you know, to markets around the world, you know, we have always been focused on organic growth and, you know, that's something we've been doing in Brazil, but we've also used M&A as well as a means of, you know, cementing positions on, on the podium and trying to achieve that gold medal position.

So, you know, I think, you know, you shouldn't be surprised as we continue to push from an organic basis and also contemplate whether there are other ways of increasing our scale in the market. And from an iGaming perspective, look, you know, we're following the strategy that we laid out at the Capital Markets Day. You know, we said in the first year there were things that were broken that we're gonna fix. We said in the second year, we get to product parity, and then the third year, we get ahead of the market. We're in the third year, we're gonna get ahead of the market, and I'm not gonna tell our competitors what we're about to launch, I'm afraid.

Paul Edgecliffe-Johnson (CFO)

Thanks, Ryan.

Operator (participant)

The next question comes from the line of Daniel Politzer from Wells Fargo. Please go ahead.

Daniel Politzer (Executive Director)

Hey, good morning, Peter. Good morning, Paul. Thank you for taking my questions. First one, quickly, what were you baking in, I guess, originally, as you gave your guidance, a few months ago, in terms of the improvement in structural holds, worse outcomes and promotions? And I just say that because I believe that in the third quarter, your structural hold was up 80 basis points year-over-year, so this was a big acceleration, and then your promos came down, I think, a little bit. So, I'm just trying to bridge what were those expectations a few months ago, versus where you came in this morning?

Peter Jackson (CEO)

Was there, was there any follow-up, Daniel? Is that the only question you got? Sorry.

Daniel Politzer (Executive Director)

Yeah. Then in terms of just the follow-up, I mean, maybe you can talk a little bit about the promotional environment over the course of the quarter. You know, obviously, ESPN Bet came to this market, and then maybe your expectations for 2024, with BetMGM viewing 2024 as a reinvestment year. That's it for me. Thanks.

Paul Edgecliffe-Johnson (CFO)

Yeah.

Peter Jackson (CEO)

Thanks, Daniel.

Paul Edgecliffe-Johnson (CFO)

Thanks, Daniel. So look, the expected GGR that we saw was stronger than we had anticipated, and we were really pleased with that. But as we talked about before on the call, seeing the very high parlay penetration coming through is very encouraging. And what's also really encouraging is the promotional environment. And we did spend a little more than we spent last year across the course of the year, but this wasn't a step up in the fourth quarter. And this is our plan, because we see that we can acquire very attractive customers. As you know, we have great data on our customer cohorts and the returns we make from them. So continuing to invest into that allows us to continue to grow the business.

You know, if you look at how we're growing the AMP, how we're growing the margin, it's all stepping in the right direction sequentially. So no meaningful increase in promotional spend, and a little ahead on the GGR percentage, but, you know, versus our expectations, but nothing massive.

Peter Jackson (CEO)

The only thing I just, you know, to make sure we sort of come back on all of your questions, you know, Daniel, is, you know, the question around, you know, what we had in our guidance at the Q3s. You know, clearly you can see the strength that we're seeing in our, sort of, you know, in our gross win expected margin. And you can see that the, you know, the gap of the $343 million and how that compares with the, you know, with the $225 million. You can see that the, you know, the variance is largely higher in expected margins.

Paul Edgecliffe-Johnson (CFO)

Thanks, Daniel.

Operator (participant)

The next question comes from the line of David Brohan from Goodbody. Please go ahead.

David Brohan (Head of Gaming Research)

Morning, guys. Just two questions for me. Firstly, could you touch on how customer luck played out year on year across the ex-U.S. business? And then just as a follow on from that, you know, I think an excellent performance in the U.K. Any color on how, you know, staking and win margin contributed to the strong sports performance in Q4? Thank you.

Peter Jackson (CEO)

Well, yeah, I'm happy to give you some views on the U.K., just while Paul's pulling together some thoughts on the luck in the ex-U.S. business. Look, I... If you look at what happened in the U.K. in Q4, we're continuing to perform, you know, very, very strongly. You know, we've—if you look at our actual gross win margins, they were ahead of last year because of a swing in luck. You know, we had very adverse sports results, if you remember, in Q4 2022, and whilst they were not great in Q4 last year, on a relative basis, they were much better. And so that contributed significantly.

So we saw a step up in the gross win margins year-over-year. We've also been making some changes to our approaches around generosity, which, you know, I know, you will all be familiar with as well. And so I think, you know, we've seen a big improvement to our net win margin in the online environment in the U.K. And, you know, from an AMPs perspective, we're down a little bit, but that's because we saw strong AMP performance in Q4 2022 because of the World Cup.

There are similar issues from the staking perspective, but I'm very pleased with the way the U.K. business is performing, taking significant market share and, you know, well ahead of what we expect any of the other major operators to be doing.

Paul Edgecliffe-Johnson (CFO)

So just coming back on that, David, so I think we talked about the third quarter, what we'd seen around luck and across the business as a whole, after the third quarter results, pretty much in line with expectations. So it does vary a bit, and like as Peter said, you know, the U.K. and Ireland has been very strong across a number of dimensions, gaming and sports, and you've got a very good business there with excellent brands and strong customer preference. And we took steps early to position ourselves for the market as we expected it to be, and you know, it has been as we expected, and we've you know, really pushed forward, and we're very pleased with the progress that we're making. Thanks, David.

Operator (participant)

The next question comes from the line of James Rowland Clark from Barclays. Please go ahead.

James Rowland Clark (Equity Research Analyst)

Hi, everyone. I've got questions on the U.K. and on Australia, please. You just obviously outlined that there's a helpful tailwind on the win margin in Q4 for sports revenue. So presumably when you excel out, gaming massively outperformed sports, and it seems that's been the case for a while now. I wondered if you could provide any color as to why that is, and whether that difference in performance is sustainable from here. On Australia, so constant FX growth was down 2% in Q4, and it was down 7% in Q3. So I wondered if you could just provide you know any color or further detail on whether the Australian division has stabilized in terms of revenue per user trends. Thank you.

Peter Jackson (CEO)

Morning, James. So look, I'm happy to give you some thoughts on the U.K., and then Paul will talk about Australia, just as a continuation, as you said, from the tailwind in margins that we saw in Q4. And look, that is undoubtedly the case and has helped support, you know, performance in sports. But I think we shouldn't underestimate the benefits of some of the product enhancements we've made as well. You know, the AccaFreeze on Sky Bet, and some of the changes made around the Bet Builder have been very popular. Remember, we have a really recreationally focused business. And you know, I think that, you know, that has been important, together with the changes that we've made from our approach around generosity.

From a gaming standpoint, you know, we've continued to drive strong cross-sell conversion from, you know, Sky Bet and Paddy Power to our casino products. And, you know, this is an area where the strength, you know, our strength in sports is definitely helping us. We've also made some significant enhancements to the quality of the product that we have available for customers, particularly around the live casino on Sky Bet and some of the slots changes we made for Paddy Power. So, you know, look, I think if you look at it, you know, we have delivered a very strong performance in gaming, and, you know, I'm very pleased with what the team have done there.

Paul Edgecliffe-Johnson (CFO)

In Australia, I think the first point I'd make is just going back to the strength of the business that we have there, and Sportsbet is the number one operator there. It has grown very significantly since pre-COVID, and yes, it is giving back some of those gains, and we talked about that at the third quarter, just flagging that, you know, as we looked at our forward-looking indicators, we thought it was going to be a bit softer, and it's pretty much manifested as we expected. So, revenue off a little bit, and that's particularly in racing, where we are seeing staking declines. Fourth quarter of last year, obviously, we had the World Cup, and as you lap that, that's driving some of the AMP declines that you're seeing there.

But it's a really good business, and we're very confident in it, and we're pleased to be the, the number one there.... Sports results were slightly favorable, but not meaningful, not a meaningful number. And overall, the results were pretty much in line with our expectations. So no, no significant change from what we talked about at the third quarter. Thanks, James.

Operator (participant)

The next question comes from the line of Monique Pollard from Citi. Please go ahead.

Monique Pollard (Managing Director)

Hi. Morning, everyone. Just a couple of questions from me, if I can. The first was just on, if you can give any sense of the level of, you know, competitive intensity or the promotional environment you're seeing in the U.S. I'm sort of conscious that you're gaining, you know, material share, let's call it that, in iGaming, with plans to gain further, Peter's comments. And, you know, free bets as a proportion of handle are sitting at about 4.2%, which I understand includes the profit boost. So just trying to understand sort of what the competitive landscape is looking like and the promotional intensity in the U.S. And then the second question, just on win margins ex-U.S. So you've given some color, it's really helpful on U.K. and Ireland and Australia.

Any color you can give on international win margins would be helpful. Thank you.

Peter Jackson (CEO)

Yeah. Well, Monique, look, from a competitive intensity perspective, you know, every year is competitive, right? And every launch of, you know, the football season, you know, feels like, you know, we've got a new competitor out there, whether it was, you know, Fanatics, you know, ESPN, we've had Caesars, you know, we've, you know, BetMGM. You know, over the years, we've had a lot of, a lot of competitive intensity. I think this year was very intense, but I think, look, the quality of our product stands us in very good stead. And when I look at the returns that we were seeing in Q4 from the customer acquisitions, you know, we're, we were very pleased. You know, we're, we're right down at the bottom end of our sort of, you know, payback periods.

So, yeah, I think the business is in a good place. We've got a, you know, a great product and, you know, great momentum to exit the year in the States.

Paul Edgecliffe-Johnson (CFO)

In terms of, you know, win margins, obviously in the international business, there's a lot of different components to that. So it's not quite as straightforward, because you get some mix impact. But we did see a step up in the win margin across the business as a whole, and it's, you know, very significant. So, you know, Sisal is a very strong business and is performing very well, and adding that into the mix has helped.

Peter Jackson (CEO)

Yeah, and Sisal had their worst run of results in October for, you know, 14 years or something. And, you know, that obviously caused a bit of pressure on the business at the beginning of the quarter, but I think that's been well understood by people.

Monique Pollard (Managing Director)

Understood. Thank you.

Paul Edgecliffe-Johnson (CFO)

Thanks, Monique.

Operator (participant)

The next question comes from the line of Joe Thomas from HSBC. Please go ahead.

Joe Thomas (Equity Analyst)

Good morning, Peter and Paul. Okay, so my two... firstly, circling back to the U.K., I may have missed the comments. You were asked about staking, and I just wondered how that had moved. It sounds as though the bulk of that outperformance has come from an improvement in the net revenue margin as you've cut generosity. So I'm just wondering what's going on in the staking number there, if you could repeat that, if I missed it, please. And then secondly, just looking at the business ex-U.S., an overall question. Obviously, you're flagging a profit outlook as expected. When I look at where consensus was going into Q4, it looks as though you've comfortably beaten revenue consensus.

Is there anything that we should be aware of in terms of costs or anything, or any other moving parts that are going on in that ex-U.S. business overall, to square that mismatch off? Thanks.

Peter Jackson (CEO)

Well, Joe, you're not allowed to ask us questions about EBITDA, but I'll, I'll decide—Paul will decide if he wants to ask you—if he wants to sort of answer any tricky questions.

Paul Edgecliffe-Johnson (CFO)

You know, so, I mean, in the U.K., staking slightly off, but that is against a World Cup comparator. So I think that's the reason for it. So, you know, a couple of percentage points lower than the same quarter of last year, but that's really very much as we would have expected. And then, yes, we talk about our results versus guidance for the ex-U.S. business, and we do have to be careful, as Peter said, against talking about EBITDA. But basically, it's in line with expectations. So there'll be a few small sort of puts and takes there, but overall, the net's out to basically the number that we were talking about previously.

Joe Thomas (Equity Analyst)

Okay, thanks.

Paul Edgecliffe-Johnson (CFO)

Thanks, Joe.

Operator (participant)

The next question comes from the line of Joe Stauff from Susquehanna. Please go ahead.

Joe Stauff (Senior Equity Research Analyst)

Thank you. Good morning. I wanted to ask, you know, in terms of the quarter and/or the half, just in the U.S., the parlay mix, you know, in terms of the between pre-game and parlay. And then in terms of, say, your structural hold, you've obviously achieved that, you know, a year or two earlier than expected in the U.S. And wondering, you know, is it still fair to assume that, you know, that's gonna increase, say, this year going forward by 50 basis points or so? What can you share with us on that?

Peter Jackson (CEO)

Well, Joe, you've got up very early, and you're asking us very difficult questions. But, you know, good morning. We haven't shared our parlay penetration in the past, but look, it is up year on year, you know, up around 480 basis points. Yeah, yeah, and it's just it's worth remembering, you know, Q4, as I said in Q3, you know, Q4 is, you know, to some extent, the high water mark for us, just in terms of penetration, because of the extent to which we see the NFL and the NBA so strong in the quarter, because they're the sports which really matter for us from a parlay perspective.

Paul, I don't know whether you wanna sort of comment on structural margins. I know we said we'll give guidance-

Paul Edgecliffe-Johnson (CFO)

Yeah.

Peter Jackson (CEO)

for 2024 at a later date.

Paul Edgecliffe-Johnson (CFO)

Yeah. So we'll talk about our expectations for 2024 on 26 of March. I think as you look at the fourth quarter and the expected GGR or the structural hold there, it is very strong. I think as we talked about before on the call, first quarter and the fourth quarter are our strongest quarters for sports and sports that matter, and where we've got most parlays, so you would expect that they would be higher. But we are very encouraged by the direction of travel over the last few years in our structural margins. It's a demonstration of what we can do from risk and trading and bringing out products that customers want, and that drive high margins. So overall, it's very good news for us.

Joe Stauff (Senior Equity Research Analyst)

Thank you, guys.

Paul Edgecliffe-Johnson (CFO)

Thanks, Joe.

Peter Jackson (CEO)

Jess, I think we are out of questions at this stage, so I'd just like to say a particular thanks to all of our the people who joined the call from the States. I know you've had to get up very early indeed, so we appreciate it very much and look forward to catching up with many of you soon. Thank you.

Paul Edgecliffe-Johnson (CFO)

Thanks, guys. Bye for now.

Operator (participant)

Thank you for joining today's call. You may now disconnect your lines.