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Annual Report & Accounts 2016 - Chief Financial Officer's review
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26 GVC Holdings PLC Annual Report 2016 PAUL MILES - CHIEF FINANCIAL OFFICER Having joined GVC as CFO in February 2017, it is my pleasure to deliver such a strong set of results. In line with the approach contained in the Report of the CEO, both "pro forma" results and "actual" results are provided. Pro forma results are presented for the period as if the acquisition of bwin.party (the "Acquisition") completed on 1 January (as opposed to the actual date of 1 February) and has been accounted for as a business combination under IFRS 3. It is worth noting the distinction between NGR, a figure before VAT, and Revenue, the "statutory" number, stated after VAT. While Clean EBITDA (earnings before interest, taxation, depreciation, amortisation, share based payments and exceptional items) is a non-GAAP measure, it is used by the Group's management to assess the underlying performance of the business. Chief Financial Officer's review REPORT OF THE CHIEF FINANCIAL OFFICER A summary of revenue, contribution and expenditure by reporting segment is shown below: YEAR ENDED 31 DECEMBER Pro forma Actual 2016 €m 2015 €m 2016 €m 2015 €m Sports Labels 4,488.3 4,312.6 4,272.3 1,683.0 Games Labels 65.2 77.1 58.9 - SPORTS WAGERS 4,553.6 4,389.7 4,331.3 1,683.0 Sports margin % 9.6% 8.6% 9.6% 9.2% Sports Labels 653.9 575.7 620.7 215.1 Games Labels 203.5 211.8 188.3 32.6 B2B 14.2 14.2 13.3 - Core 871.6 801.7 822.3 247.7 Non-core 23.0 20.5 21.1 - NGR 894.6 822.2 843.4 247.7 EU VAT (21.4) (14.2) (20.1) (1.2) REVENUE 873.2 807.9 823.3 246.5 Sports Labels 362.0 318.9 342.5 113.6 Games Labels 89.0 109.6 82.9 21.8 B2B 14.0 13.9 13.1 - Core 465.0 442.3 438.5 135.4 Non-core (1.0) 0.5 (1.0) - CONTRIBUTION 464.0 442.8 437.5 135.4 Sports Labels 55% 55% 55% 53% Games Labels 44% 52% 44% 67% B2B 99% 98% 98% 0% Core 53% 55% 53% 55% Non-core (4%) 2% (5%) 0% CONTRIBUTION MARGIN 52% 54% 52% 55% Core 195.8 195.0 185.5 62.5 Non-core 17.6 21.9 16.3 - Corporate 45.0 62.7 42.3 18.7 EXPENDITURE 258.4 279.6 244.0 81.3 Core 269.3 247.3 253.1 72.9 Non-core (18.6) (21.4) (17.3) - Corporate (45.0) (62.7) (42.3) (18.8) CLEAN EBITDA 205.7 163.2 193.5 54.1 The table on page 27 highlights the bridge between the actual and pro forma numbers for the year.