2021 was another record-breaking year for 888, with Revenue of US$980 million and Adjusted EBITDA of US$165 million reflecting a strong year of operational and financial performance to complement the significant strategic progress we made during the year.

At the time of our interim results we made a change to how we report our product splits within B2C to better reflect how the business is managed and in line with how peer companies present results. B2C revenues had historically been split out into the component products of Casino, Poker, Sport and Bingo. The Group now combines Casino, Poker and Bingo revenues under one heading of Gaming, with no change to Sport, which is now referred to as Betting.

B2C review

B2C continues to reflect the vast majority of the business, at over 96% of revenue. B2C revenue grew by 15.7% in 2021, reflecting a strong performance across our core markets, and rapid expansion in some of our growth markets.

The growth was driven by our focus on our areas of competitive advantage, product, brand, and customer excellence, that helped deliver a 4% increase in average monthly players despite the prior year seeing a significant spike in activity linked to the initial stages of the shift from retail to online during the COVID-19 pandemic, particularly within poker, and our temporary exit from the Netherlands in Q4 2021. Our improved product and AI driven personalisation is delivering increased share of wallet among our players, helping to drive market share gains across key markets.

2021 was another year where quarterly trends were heavily impacted by the world pandemic and associated government responses across our global markets throughout the year. In Q1 2021, we recorded our highest ever quarterly revenue, with exceptionally strong growth of 67% year-over-year reflecting the impact of leisure restrictions across several of our key markets, with customers seeking alternative digital entertainment.

As the year progressed the comparative periods got stronger and stronger, resulting in overall year-over-year growth for H1 of 41%, but a decline of 4% in H2. Q4 2021 in particular suffered from the exit from the Netherlands and weaker than expected sports margins, resulting in an overall decline in B2C revenue for Q4 of 14% against a strong comparative period.

The strong performance of record revenue in 2021 and double-digit growth was also in spite of the US$70-100 million regulatory related revenue headwinds that we outlined in the prior year. These headwinds related not only to German regulatory changes, but principally to safer gambling measures we have taken, particularly in the UK, to reduce the potential for customers to experience harm. The full impact of these items was weighted more towards H2, resulting in H2 revenue being sequentially 17% lower than H1, but in line with our expectations. These measures position the business well for any potential changes that may come as a result of the impending UK government review of gambling legislation, and we will outline more about all the work we are doing to make 888 a safe place to play in our annual report.

Gaming revenue increased by 17.7% over the prior year, driven by our globally renowned casino product, which generated 90% of our gaming revenue.

During the year we launched over 870 new games, bringing our current content library to over almost 3,000 games, including launching over 200 new live casino tables, such that we now believe we have one of the largest live casino offerings globally, with more than 400 tables delivered by 4 different providers.

Our in-house content studio Section8 delivered 17 new games during the year, including some smash hit titles like Mad Max Fury Road and Millionaire Genie Megaways. Typically, 5-6 of the top 20 performing slots at any given time are produced by Section8, and this differentiation is driving improved customer loyalty, with exclusive games they can only find at 888. We have exciting plans for our Section8 studio and over the next few years plan to double our investment in it to deliver even more exciting new exclusive content. 

Alongside industry leading content, we continue to focus on product leadership and improving the customer experience, including continued investment in AI driven personalisation and launching several new product features.

Poker delivered a solid performance, and we continue to invest in our latest poker platform, with a focus on mobile-first development and a recreational customer experience. Poker continues to be an important customer acquisition channel, and while poker product revenues normalised in 2021, following an exceptional boost across the poker industry in 2020, revenues were in-line with management expectations. The increased focus on customer experience, mobile products, and easier cross-sell journeys to casino and sport meant that overall revenues from the 888poker brand significantly outperformed poker product revenues. 

During the year we announced the potential sale of our Bingo business for up to US$50 million to a division of Broadway Gaming, in order to increase focus on our core growth strategy including US expansion. The Board considered that the Bingo business did not meet the criteria to be classified as held for sale at 31 December 2021 because the business was not available for immediate sale, as described in further detail in note 8 of the financial statements. For 2022 and until the sale completes we will continue to include bingo revenues within our Gaming revenue number. Bingo revenue declined by 7% year-over-year, principally reflecting a strong comparative period with bingo benefitting in the prior year from retail venue closures, particularly within the UK. 

Betting revenue increased by 4% during the year, and we completed the successful migration of over 70% of our betting volume to our in-house sportsbook during the year. Across the year as a whole win margins were flat, but the impact of sporting results on year-over-year growth trends varied significantly by quarter. H1 betting revenue growth of 82% was primarily driven by the sports cancellations in the prior year, but was also helped by operator favourable results contributing to a 1.3 percentage point increase in win margin year-over-year.

Conversely the H2 betting revenue decline of 40% year-over-year was driven by stronger comparatives as sporting calendars were condensed into Q3 2020 to catch up, together with more customer friendly results. Q4 in particular was a period for the customers, with win margin of 4.9% being approximately 2 percentage points lower than expected, and 3.2 percentage points lower than the prior year, contributing to the Q4 betting revenue decline of 56%. Q4 was also negatively impacted by the exit from the Netherlands, which had been a strong performing sports betting market for the Group.

B2B review

B2B revenues increased by 8% year-over-year, with growth in both our bingo B2B business and our US B2B business.

Our B2B bingo business was included in the potential sale of the bingo division noted above, and similarly to B2C, until the sale the B2B bingo revenue will be included in our reported financials.

We continue to power the only shared liquidity poker network in the US in partnership with Caesars under the World Series of Poker (WSOP) brand. During the year WSOP launched in Pennsylvania and we expect to launch in Michigan in 2022 subject to regulatory approval. Pennsylvania represented the first state in the US to receive our latest Poker8 platform, and are hopeful that we can expand the shared liquidity network to these additional states in the coming years.

REVENUE BY GEOGRAPHIC MARKET

Regulated markets

Revenue from regulated markets continued to represent the majority of Group revenue in 2021, with revenue from regulated and taxed markets⁵ increasing by 17% and accounting for 74% of revenue (2020: 73%). 888's strategic focus remains on achieving growth in its regulated core and growth markets where the Group can leverage its sustainable competitive advantages to drive long-term sustainable growth.

⁵ Regulated and taxed markets refer to jurisdictions where the Group operates under a local licence or where the Group is liable for gaming duties, GST or similar taxes.

The below table shows the Group's revenue by geographical market:

UK

The Group delivered revenue growth in the UK of 17% to US$388.9 million (2020: US$333.5 million), despite lapping a strong comparative following the 63% growth reported in the prior year. The growth during 2021 reflected continued solid market share progress in this highly competitive market. This continues to be driven by investing in our areas of competitive advantage, namely product and content quality, brand and marketing, and customer excellence.

During the year the Group continued to focus on safer gambling, with a range of additional measures implemented in order to reduce the risk of potential harm. These measures, which were largely rolled out from Q2 onwards, included increased affordability checking, particularly among customers aged 18-25, lowering certain product stake limits, and enhancing the Observer AI system with lower thresholds for intervention. The combination of these measures, together with the lifting of leisure restrictions from May onwards meant that UK revenues in H2 2021 were lower than in H1 2021, as expected, and in line with the wider industry trend.

Italy

Italy delivered continued strong revenue growth of 37% to US$118.3 million (2020: US$86.5 million), and now comprises over 12% of the Group's total revenue. This strong performance was seen across both betting and gaming and is driven by the strength of 888's established brands in the Italian market, which continue to benefit from structural tailwinds of digital migration from land-based gambling despite the advertising ban.

888 held its market share broadly stable overall for the year, which is an excellent result given the online-only nature of our offering, versus the leading competitors who all have a land-based presence that provided an omni-channel tailwind in 2021 as retail was reopened during the year.

EMEA (excluding the UK and Italy)

Revenue from EMEA excluding the UK and Italy increased by 4% to US$333.5 million (2020: US$320.9 million). Regulated markets such as Romania, Ireland and Portugal saw particularly strong growth trends, partially offset by the exit from the Netherlands from October, and a decrease in revenue from Germany which was impacted by the transition to the new regulatory regime. The Group believes Germany represents an attractive growth opportunity going forward under the new regulatory regime and continues to invest to grow its brand presence there. We plan to apply for a licence in the Netherlands and are hopeful we can relaunch there on a regulated basis during H2 2022.

In Spain, revenue was flat at US$67.5 million (2020: US$67.5 million), reflecting both the strong comparative period with strong growth in 2020 aided by COVID-19 related restrictions, together with a challenging competitive environment following the implementation of significant marketing restrictions from July. In the first 9 months of the year, the overall Spanish market size increased by 3%, and management estimates that its market share was broadly stable in the year overall.

Americas

Revenue from Americas increased by 34% to US$125.6 million (2020: US$93.7 million), primarily driven by strong growth in Canada, where the Group has received a local licence in Ontario, with the regulated market set to launch in Q2 2022. We believe the Canada market represents an attractive long-term growth opportunity for the Group, where 888 has an established brand presence and can exploit its sources of competitive advantage.

US revenue increased by 6% to US$22.0 million (2020: US$20.8 million), reflecting a good performance for the 888casino brand in New Jersey, offset by investment in promotions to drive customer activity associated with the launch of SI Sportsbook in Colorado in September, and increased investment in the fourth quarter. We have a clear roadmap of state prioritisation and were pleased to be awarded a licence in Virginia during the year, with plans to launch there in 2022. The Group currently expected to launch in 3-4 additional states during 2022, with an increased investment in the US B2C business to take advantage of the long-term strategic growth opportunity.

During the year the Group launched in Pennsylvania on a B2B basis with our partner the World Series of Poker and we are ready to launch WSOP in Michigan during 2022 subject to regulatory approval.

RESULTS OVERVIEW

Gaming taxes and duties

Gaming duties levied in regulated and taxed markets increased by 21.2% to US$184.0 million (2020: US$151.8 million) and the proportion of Gaming taxes and duties to revenue increased to 18.8% (2020: 17.9%). This is a result of the Group's strong revenue growth in regulated and taxed markets and the implementation of a new tax regime in Germany commencing July 2021.

Other cost of sales

Other cost of sales¹, which mainly comprise commissions and royalties payable to third parties, chargebacks, payment service provider ("PSP") commissions and costs related to operational risk management and customer due diligence services, increased by 10.3% to US$149.1 million (2020: US$135.1 million). The proportion of cost of sales to revenue decreased to 15.2% (2020: 15.9%). This is primarily due to the successful migration of over 70% of our sportsbook business to our in-house platform, with associated third-party royalty savings, together with additional scale benefits. Other cost of sales increased by 17.3% to US$158.4 million (2020: US$135.1 million).

¹ Excluding foreign exchange differences of US$9.3 million.

Gross profit

Gross profit increased by 15.0% to US$647.0 million (2020: US$562.8 million), broadly in line with the increase in revenue, with a slight decrease in the gross margin from 66.2% to 66.0%. The scale benefits and optimisation of third-party costs (including the use of our in-house sportsbook) were offset by the increase in gaming duties and taxes.

Marketing expenses

One of the key drivers of 888's business is effective and data-driven marketing spend. Overall marketing expenses increased by 29.3% to US$306.5 million (2020: US$237.1 million) as we invested to drive growth across our key markets. The marketing ratio increased to 31.3% (2020: 27.9%) largely reflecting upfront investment in nascent markets, such as our US B2C business under the SI Sportsbook brand, and our regulated German sports betting offering.

Increased marketing investment in new or regulating markets is in line with the Group's strategy to build world-class brands and use its data-driven marketing expertise to drive increased customer activity and deliver market share gains in key markets.

The Group's focus on product and content leadership, world-class brands, and customer excellence should enable it to reduce the marketing ratio over time, both through reduced costs of acquiring customers, and increased customer loyalty driving greater share of wallet.

Contribution

Contribution, which represents Gross profit less Marketing expenses, increased by 4.6% to US$340.5 million (2020: US$325.7 million), while Contribution margin decreased to 34.7% (2020: 38.3%), due to the increased marketing investment during the year to support future growth plans.

Operating expenses

Operating expenses¹ (which mainly comprise employment costs, legal and professional fees, development costs, IT services and infrastructure maintenance) slightly increased to US$175.5 million (2020: US$170.1 million). The increase during the year primarily reflects the increased professional services linked to the growing complexity of the Group's regulatory footprint and additional investment in safer gambling and customer protection technology.

¹ Excluding depreciation and amortisation of US$36.3 million (2020: US$33.6 million) and share benefit charges of US$8.4 million (2020: US$11.0 million).

Adjusted EBITDA

Adjusted EBITDA increased 6.0% to US$165.0 million (2020: US$155.6 million), representing an Adjusted EBITDA margin of 16.8% (2020: 18.3%). The increase in Adjusted EBITDA was driven by the increase in contribution as explained above, with the reduction in margin principally reflecting the increased investment in the US B2C business and the associated launch of the SI Sportsbook brand. Excluding the US business in both years, the Adjusted EBITDA margin was flat year-over-year.

Exceptional items

(1)   Restructuring costs, related to employees redundancies costs and disposal of property, plant and equipment as part of the Group's decision to close its Antigua office.

(2)   Exceptional legal and professional costs associated with the proposed acquisition of the international (non-US) business of William Hill.

(3)   Retroactive charge associated with reassessment of potential gaming duties relating to activity in prior years.

(4)   During 2020, the Group carried out an impairment test for the Goodwill and intangible assets of the Bingo business which resulted in impairment charges.

(5)   While assessing the provision in respect of exceptional matters, management concluded that it could be adjusted. The net decrease in this provision was accounted for as exceptional income, in line with the treatment when the provision was created.

(6)   Capital gain related to the sale of investment in Come2Play Limited.

Finance income and expenses

Finance expenses of US$15.1 million (2020: US$6.1 million) less finance income of US$0.1 million (2020: US$0.1 million) resulted in a net expense of US$15.0 million (2020: US$6.0 million). Finance expense mainly comprised US$9.3 million non-cash currency exchange differences which are presented in the consolidated income statement as part of the other cost of sales, US$1.3 million non-cash interest expenses resulting from operating leases, and US$4.4 million interest charge related mainly to the settlement with the Israeli tax authorities.

888 continually monitors foreign currency risk and takes steps, where practical, to ensure that net exposure is kept to an acceptable level.

Profit before tax

Profit before tax increased to US$81.3 million (2020: US$26.7 million) mainly as a result of lower exceptional expenses in 2021. Adjusted profit before tax was US$113.7 million (2020: US$116.0 million), impacted by non-cash currency exchange differences and interest charges.

Taxation

Taxation for the period was US$12.4 million (2020: US$15.4 million), mainly as a result of lower taxable profits and the settlement signed with the Israeli tax authorities which was concluded in December 2021, as described in further detail in note 5.

Net Profit and adjusted net profit

Net profit was US$68.9 million (2020: US$11.3 million). Adjusted profit¹ increased slightly to US$101.3 million (2020: US$100.6 million).

¹ As defined in note 6 of the financial statements.

Earnings per share

Basic earnings per share increased to 18.6¢ (2020: 3.1¢) a result of higher Net profit in 2021 compared to the previous year, as outlined above. Adjusted basic earnings per share was 27.3¢ (2020: 27.3¢).

Further information on the reconciliation of Adjusted basic earnings per share is given in note 6 to 2021 financial statements.

Dividend

The Board of Directors is not recommending a final dividend to be paid in respect of the year ended 31 December 2021, in light of the potential capital requirements expected as part of the pending William Hill transaction. 888's dividend policy remains unchanged and dividends are kept under review by the Board to ensure an appropriate allocation of capital to create value for shareholders. As a result, the total dividend for the year is 4.5¢ per share (2020: 18.0¢ per share).

Balance sheet            

Total assets as at 31 December 2021 amounted to US$540.0 million (2020: US$486.7 million).

Current assets as at 31 December 2021 amounted to US$324.1 million (2020: US$274.6 million) and current liabilities were US$340.0 million (2020: US$298.9 million).

888's Cash and cash equivalents as at 31 December 2021 amounted to US$255.6 million (2020: US$222.2¹ million), an increase of US$33.4 million. The balance of cash owed to customers as at 31 December 2021 was US$81.1 million (2020: US$74.0 million), leaving an adjusted net cash position of US$174.5 million (2020: US$148.2 million).

¹ Including US$32.2 million on-demand deposits previously presented as trade receivables and has been reclassified to cash and cash equivalents.

Cash flow

Net cash generated from operating activities was US$133.2 million (2020: US$205.0¹ million). Net cash generated from operating activities before working capital movement was US$138.5 million (2020: US$145.7 million). The change in working capital was mainly attributed to a US$16.0 million increase in prepayments and guarantees made during 2021, while in the previous year working capital was affected by an increase in trade and other payables, related to the sharp increase in trading activity during Q4 2020.

Net cash used in investing activities was US$30.5 million (2020: US$30.9 million), mainly comprising acquisition of property, plant and equipment of US$5.6 million (2020: US$10.6 million) and internally generated intangible assets of US$22.6 million (2020: US$17.9 million).

¹ Net cash generated from operating activities in 2020 previously presented as US$179.2 million was restated to reflect the reclassification of on-demand deposits from trade receivables to cash and cash equivalents.

Net cash used in financing activities was US$70.3 million (2020: US$58.9 million), related mainly to a dividend payment of US$61.3 million (2020: US$33.2 million) and payment of lease liabilities of US$7.2 million (2020:US$6.4). During 2020, the Group repaid US$18 million that was outstanding under the RCF in full and during the year the Group cancelled the RCF facility.

Going concern

The Group closely monitors and carefully manages its liquidity risk. In its going concern assessment, the Directors have considered two cases. The first assumes the Group on a standalone basis as the William Hill International ("WHI") transaction is yet to be completed and pending shareholders' approval (the "standalone" case) and a second in which the WHI acquisition completes in Q2 2022 (the "acquisition" case), as described in further detail in note 2.

Following consideration of the standalone and acquisition cases and the respective sensitivity analysis the Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the next 21 months, until 31 December 2023. Therefore, the Directors continue to adopt the going concern basis of accounting in preparing the consolidated financial statements.

RISK MANAGEMENT STRATEGY

The Board acknowledges that there is no return without risk. However, key risks must be identified, evaluated and where possible quantified in order for the Board to rationally determine how to manage risk to generate optimal return.

The Board acts in accordance with a Risk Management Policy, which aims to explicitly identify and evaluate key risks underlying the Group's core business strategy and standardise the approach to risk prioritisation and management across 888's operations. This in turn means that effective controls can be put in place to ensure 888 is able to manage its operations effectively now and into the future. 888's risk register is updated periodically and regular discussions are held at Board and management level of the role of risk in 888's business.

888's culture emphasises the need for employees to take responsibility for managing the risks in their own areas and to transparently and timely report "bad news" and "near miss" incidents, with a willingness to constantly learn and improve. Where failures are identified, 888's management is committed to appropriately investigating what happened and why, in order to learn from mistakes. The Board has also adopted a Reporting and Escalation Procedure to ensure timely reporting of internal reportable events including bugs, technical failures, information security malfunctions and marketing and other operational incidents which may affect customers.

The Board considers that 888 complies with the requirements of the Financial Reporting Council's Guidance on Risk Management, Internal Control and Related Financial and Business Reporting dated September 2014, and specifically confirms that:

·      it is responsible for 888's risk management systems and for reviewing their effectiveness;

·      there is an on-going process for identifying, evaluating and managing the principal risks faced by 888;

·      the systems have been in place during 2021 and up to the date of approval of the annual report and accounts; and

·      they are regularly reviewed by the Board (see the 2021 Annual Report for further details of the review conducted in 2021).

As part of its regular risk assessment procedures, the Board takes account of the significance of environmental, social and governance matters to the business of the Company, and has identified and assessed the significant risks of that nature to the Company's short and long-term value, as well as the opportunities to enhance value that may arise from an appropriate response. The Board confirms it has received adequate information to make this assessment and that these matters are considered in the training of directors. The Board has specifically verified environmental, social and governance disclosures - part of which, where mentioned herein, are verified by external advisory firms and internal audits - with Group senior management in order to ensure their accuracy.

Risk appetite

Addressing risk is a high priority for the Board and effective risk management is an integral part of the way we conduct our business on a daily basis. The Board factors into the risk assessment impact, likelihood and appetite considerations. Risk is managed across the Group in the context of overall risk appetite and during 2021 the Board considered risk appetite to ensure adequate resources are allocated to identified risks. The Board reviewed and approved the following risk appetite statement:

Regulatory risk è increased during 2021

The risk: The regulatory framework of online gaming is dynamic and complex. Change in the regulatory regime in a specific jurisdiction can, depending on the nature of the change and its impact on the group's offering, have a material adverse effect on business volume and financial performance in that jurisdiction. Over time the number of jurisdictions that have regulated online gaming has increased, and is expected to increase further. 888 places focus on growing in regulated markets, and in 2021 69% of its revenue was derived from locally regulated markets. The Group seeks to obtain licences in all markets the Group identifies as sufficiently attractive from a strategic perspective. However, in some cases, lack of clarity in the regulations, or conflicting legislative and regulatory developments, mean that 888 may risk failing to obtain an appropriate licence, having existing licences adversely affected, or being subject to other regulatory sanctions, including internet service provider blocking, payments blocking, black-listing and fines. Furthermore, legal and other action may be taken by incumbent gaming providers in jurisdictions which are seeking to regulate online gaming, in an attempt to frustrate the grant of online gaming licences. Newly enacted or modified licensing regimes may impose operational conditions on the group that are onerous or commercially unviable. Finally, changes to either the regulatory framework or enforcement policy relating to online gaming in certain markets may effectively force the Group out of certain markets where it currently operates or compel it to change its business practices or technology in a way that would materially impact results.

Relevance to strategy: Compliance with regulatory requirements and the maintenance of regulatory relationships in multiple jurisdictions is key to maintaining 888's online gaming licences which are critical to the operation and growth of its online gaming business. With the majority of revenue generated from jurisdictions where the group is locally licensed, the importance of such licenses and their centrality to the business constantly increase. A growing number of jurisdictions worldwide now either locally license or otherwise regulate online gambling, and therefore 888 may be exposed to an increasing number and stringency of licensing requirements or conversely to attempts to block access to 888's offering to players in certain jurisdictions or to penalize 888 for its offering. A robust understanding of the legal and regulatory position in key locations worldwide is crucial to mitigating this risk.

How the risk is managed: 888 manages its regulatory risk by routinely consulting with legal advisers in various jurisdictions where its services are marketed or which generate significant revenue for the Group. Furthermore, 888 obtains frequent and routine updates regarding changes in the law in jurisdictions of interest that may be applicable to its operations, working with local counsel to assess the impact of any changes on its operations. 888 constantly adapts and moderates its services to comply with legal and regulatory requirements. 888 is in contact with regulators, either directly, or through local counsel, ensuring that we are continuously kept up to date with regulatory updates, expectations, and changes to technical standards and other applicable regulations. 888 has continued to review possible organizational changes in order to strengthen regulatory compliance oversight, as well as to improve co-operation between the different departments and streamline processes of settling any conflicts between them, ensuring that 888's regulatory requirements and duty to uphold the licensing objectives always take priority over commercial interests. Finally, 888 blocks players from certain "blocked jurisdictions" using multiple technological methods as appropriate, and in addition is able to moderate budgeted spend and focus on markets where uncertainty is high, along with adjusting its marketing strategy to online channels thus allowing faster cost adjustment when needed. 888 also believes its investment in product developments, such as better communication tools, improved player experience and games adjustments, serves to mitigate this risk.

What happened in 2021: In part as a response to the ongoing COVID-19 pandemic, various jurisdictions adopted a more stringent approach to player protection, primarily to avoid emergence of problem gambling patterns amongst those sheltering at home, and to curtail excessive spending on gambling during a period of economic downturn. In various jurisdictions, this took the form of advertising restrictions, or the imposition of stricter player protection and responsible gambling measures, either temporarily or on a permanent basis.

The Gambling Commission of Great Britain ("UKGC") continued to take a robust approach towards compliance, adopting further guidance and regulations, increasing the level of oversight over licensees and escalating enforcement work to take strong action against operators for failing to meet regulatory requirements and standards. The primary areas of focus for the UKGC were responsible gambling and prevention of underage gambling, consumer protection, and anti-money laundering. The UKGC adopted additional requirements, e.g. the implementation in October 2021 of a range of game design changes such as minimum spin speeds, removal of auto play, and the need to clearly display session length, wins and losses. In December 2020, the UK Government launched a review of the Gambling Act 2005, with the aim to ensure it is "fit for the digital age". The review is still pending and will cover the regulator's powers as well as regulation of marketing and restrictions to online offerings. A white paper covering the Act's review is expected in 2022, which should set out the areas of focus for potential changes. The areas that have received significant media coverage typically centre around marketing and sponsorship restrictions, mandatory affordability thresholds, and stakes limits for online slots. While the Group has assessed the likely impact from a range of potential scenarios it is still unclear what measures will be included in the review. In November 2021, the UKGC opened a consultation on changes and updates to its Licensing, Compliance and Enforcement Policy, aimed at bringing certain gambling products which the UKGC consider to contain financial elements under the regulation of the Financial Conduct Authority. The Group continued to work closely with the UKGC on compliance matters, and also to update its policies and procedures and to strengthen internal reporting lines to ensure compliance within the business, investing significant resources in regulatory compliance measures. On 1 March 2022, the UKGC published a statement on its website related to its investigation following its 2020 compliance assessment of the Group, which outlined certain shortcomings in respect of former safer gambling and anti-money laundering policies, procedures and controls of the Group and pursuant to which 888 was fined £9.4m.  888 took immediate and appropriate actions to improve the relevant internal policies, procedures and controls to ensure it is fully compliant with its licensing obligations, and the UKGC has recognised that 888 took corrective steps to address the identified failings. 888 continues to test and monitor how we conduct our business and ensure we remain aligned to the expectations of our stakeholders, including our regulators

In Germany, the regulatory landscape is undergoing the most drastic change in a decade with the introduction of federal sports betting licenses (which 888 was awarded in June 2021), as well as online casino licenses (covering poker and slots) which 888 has applied for. Until such time as the online casino licenses would be awarded, a temporary toleration regime was adopted for online casino gambling, with which 888 is compliant. Compliance with the conditions of the new licensing and toleration regimes required various modifications and alignments of the group's German offering, which has impacted the profitability of its operations in that jurisdiction. 888 has been successful in having certain prohibition orders previously issued against it withdrawn, and having certain others suspended, as it continues to litigate against outstanding prohibition orders in various German states. The emergence of a licensing regime for sports betting and online casino may, in the foreseeable future, render these prohibition orders obsolete. 

In the Netherlands, the online gambling market was launched on a locally regulated basis in October 2021, and the Group temporarily exited the market from this date. Prior to this, the Group had been operating in compliance with a set of "prioritisation criteria" that were set out by the regulator and continually amended from 2019-2021. However, the latest update to the criteria that was announced in September 2021, in what was perceived as a surprise move, effectively removed the option of operating in compliance with the criteria, and instead required operators to be fully licensed. The Netherlands still represents an attractive medium-term opportunity for the Group and it intends to re-enter the market once it files for and obtains a local license, currently expected in the second half of 2022.

In Sweden, the Group has been operating under a local license since 2019. The Swedish regulator initially showed itself to be strict and proactive in enforcing regulatory standards, and on occasion informed the industry of its position on compliance by penalizing operators it perceived as non-compliant. 888 continues to take measures to ensure that its operations are in line with local requirements.

2021 also saw a continued growing trend of civil litigation claims which started in Austria in 2020 against foreign-licensed operators, claiming refunds due to lack of local licensing. This trend is backed by case law amongst the higher Austrian courts. In addition, claim-financing bodies started gathering claims against operators. The Group is dealing with these civil claims with help from its local advisors, and has taken proactive steps to mitigate its risk from these claims. Whilst it continues to pursue various legal avenues, the Group is keeping an eye on the risk of operating in this market.  A similar uptick in civil claims also recently started in Germany, but to a lesser extent.

In January 2021, the federal Court of Appeals for the First Circuit denied an appeal by the US Department of Justice seeking to uphold a 2019 memo on the scope of the federal Wire Act. By denying the appeal, the Court confirmed the previous opinion from 2011, which concluded that the Act applies only to sports betting. As the decision by the Court was left unchallenged by the US Department of Justice, this ruling helps serve 888 and the online industry in providing a more legally sound basis for internet gaming activity in the US. More generally, the US continued to move towards increased regulation of various forms of online gambling. The group was licensed in Colorado in December 2020 and in both Michigan and Virginia in November 2021. The group continues to seek licensure in other US jurisdictions.

Information Technology and Cyber risks è remained stable during 2021

The risk: IT systems may be impacted by unauthorised access, cyber-attacks, DDoS (Distributed Denial of Service) attacks, theft or misuse of data by internal or external parties, or disrupted by increases in usage, human error, natural hazards or disasters or other events. Cyber-attack and data theft incidents may expose 888 to "ransom" demands and costs of repairing physical and reputational damage. Failure of IT systems, infrastructure or telecommunications / third party infrastructure may cause significant cost and disruption to the business and harm revenues. Lengthy down-time of the site (including in transitioning to activated disaster recovery servers) could also cause 888 to breach regulatory obligations.

Relevance to strategy: As an online B2C and B2B business, the integrity of 888's IT infrastructure is crucial to the supply of its offerings and compliance with its regulatory obligations and to the maintenance of customer loyalty.

How the risk is managed: Cutting-edge technologies and procedures are implemented throughout 888's technology operations and designed to protect its networks from malicious attacks and other such risks. These measures include traffic filtering, anti-DDoS devices and obtaining anti-virus protection from leading vendors. Physical and logical network segmentation is also used to isolate and protect 888's networks and restrict malicious activities. The IT environment is audited by independent auditors, such as the PCI DSS security audit. These audits form part of 888's approach to ensuring proper IT procedures and a high level of security. In order to ensure systems are protected properly and effectively, external security scans and assessments are carried out on a regular basis.  888 has a disaster recovery site to ensure full recovery in the event of disaster. All critical data is replicated to the disaster recovery site and stored on a Glacier AWS service. In the event of loss of functionality of 888's critical services, the business can be fully recovered through the resources available at the disaster recovery site. In order to minimise dependence on telecommunication service providers, 888 invests in network infrastructure redundancies whilst regularly reviewing its service providers. As a part of its monitoring system, 888 deploys set user experience tests which measure performance from different locations around the world. Network-related performance issues are addressed by rerouting traffic using different routes or providers. 888 operates a 24/7 Network Operations Centre ("NOC"). The NOC's role is to conduct real time monitoring of production activities using state-of-the-art systems. These systems are designed to identify and provide alerts regarding problems related to systems, key business indicators and issues surrounding customer usability experience. The IT environment tracks changes, incidents and service level agreement key performance indicators in order to ensure that client experience is consistent and well managed. As part of these procedures, capacity planning takes place and infrastructure is built accordingly. System-wide availability and business-level availability is measured and logged in the IT information systems.

What happened in 2021: COVID-19 was a catalyst for upgrading the Group's work from home capabilities across all sites, with security and audit measures adjusted accordingly. The Group migrated its front tier websites to a cloud based solution and implemented leading cloud protection and audit tools in 2021. The Group further improved its DDoS architecture, including mitigation of device upgrades and moved to an always-on architecture.   Automation of security processes has also been further progressed, together with implementation of Advanced Persistent Threat (APT) protections, and additional "write once read many" (WORM) backup of the Group's data centre to mitigate ransomware risk.

Data Protection risk è remained stable during 2021

The risk: 888 processes a large quantity of personal customer data, including sensitive data such as name, address, age, bank details and gaming / betting history. Such data could be wrongfully accessed or used by employees, customers, suppliers or third parties, or lost, disclosed or improperly processed in breach of data protection regulations. In particular, the European General Data Protection Regulation ("GDPR") entered into force in May 2018, its equivalent in the UK ("UK GDPR") and the laws of the US states in which 888 operates, having a significant effect on the Company's privacy and data protection practices, as it introduced various changes to how personal information should be collected, maintained, processed and secured. Non-compliance with the GDPR or UK GDPR may result in fines of the higher of €20 million or 4% of the Company's annual global turnover, and the Company will be particularly exposed to enforcement action in light of the amount of customer data it holds and processes. In addition, various countries in the EU have introduced domestic data protection laws incorporating the GDPR requirements. Moreover, 888 makes use of various tracking technologies (such as cookies, SDKs, JavaScript and other forms of local storage), which are subject to stricter standards of consent and transparency, both under the GDPR and the e-Privacy Directive. The Company could also be subject to private litigation and loss of customer goodwill and confidence.

Relevance to strategy: The holding and processing of personal and sensitive data in a lawful and robust manner is central to 888's analytics-based business strategy. As an online B2C and B2B business, the integrity of 888's data protection framework is crucial to the supply of its offerings, compliance with its regulatory obligations and maintenance of the impressive customer loyalty with which 888 is entrusted. Data protection requirements may also affect 888's ability to expand its business to new and emerging markets.

How the risk is managed: 888 continuously maps the personal data life-cycle within the organization, including how personal data of its customers and employees is collected, stored, secured and shared with third parties. 888 has a designated internal Data Protection Officer ("DPO") and it continuously revamps its policies and procedures on relevant matters including exercising user rights and data retention, data sharing with third parties, security policies, as well as reviewing necessary product and IT implementation. Such policies and procedures are reviewed and updated on an ongoing basis to align with the most up to date regulatory guidelines. 888 has further put in place adequate contractual measures with respect to sharing and transferring data with third parties, reviewing its privacy notices and other customer notifications and reviewing the current data security framework on an ongoing basis.

What happened in 2021: 888 reviewed and updated its internal data protection policies and procedures, as well as notices provided to the users (such as privacy notices, cookie notices and consent forms), so as to ensure alignment with regulatory developments and guidelines in existing and new markets; reviewed a dedicated notice and choice mechanism (to be implemented on 888's online properties) so as to meet the regulatory requirements relating to the use of tracking technologies; amended its data sharing agreements in accordance with regulatory requirements; conducted Data Protection Impact Assessments and Legitimate Interest Assessments for new processing activities; ensured that data subjects requests to exercise rights are handled in an appropriate manner, in accordance with the internal procedures and within the regulatory timeframe; the DPO of 888 acted to ensure a privacy-aware culture within 888 by way of conducting training and privacy awareness exercises to relevant employees, departments (e.g. customer support and marketing teams) and senior management; the DPO of 888 produced an annual report with the objectives of providing an overview of the key events, regulatory investigations and inquiries, and data subjects' complaints since the GDPR entered into force, enabling 888's senior management to ascertain the data protection risks and challenges in the environment in which the Company operates and the regulatory exposure, support 888's senior management with the effort to take appropriate risk mitigation steps and allocate appropriate resources for handling data protection issues, and increase the awareness to data protection obligations and the 888's responsibilities; reviewed and responded to data subjects' complaints and regulatory inquiries relating to compliance with applicable data protection requirements; and monitored for and investigated data breach attempts/incidents and took the appropriate steps to enhance its cybersecurity posture and mitigate the residual risks.

Taxation risk è remained stable during 2021

The risk: Heightened attention continues to be given to matters of cross-border taxation in line with the G20/OECD Base Erosion and Profit Shifting recommendations. Important international tax rules of relevance to the Company include:

·      Pillar Two: In December 2021, the OECD published the Pillar Two model rules for domestic implementation of 15% global minimum tax, and the EU followed suit shortly thereafter. In early 2022, the OECD will release the commentary relating to the model rules and address co-existence with the US Global Intangible Low-Taxed Income (GILTI) rules. This will be followed by the development of an implementation framework focused on administrative, compliance and co-ordination issues relating to Pillar Two. It is expected that the global minimum tax will be implemented at national level by 2023. The Pillar Two rules, once implemented, are expected to apply to 888, along with detailed transfer pricing reporting and exchange of tax information rules known as "Country by Country Reporting", insofar as 888's annual revenues exceed EUR 750 million. In the context of implementation of Pillar Two, it is generally expected that national-level digital service taxes will be revoked. In August 2021, in anticipation of the introduction of Pillar Two rules internationally, Gibraltar increased its headline corporate tax rate from 10% to 12.5%.

·      UK - DPT and ORIP: Other important international tax rules include the UK's Diverted Profits Tax (DPT), pursuant to which in circumstances where profits are deemed "diverted" from the UK under the terms of such legislation, tax at a rate of 25% (increasing to 31% from 1 April 2023) is imposed on profits which would be attributable to a permanent establishment (PE) in the UK were an "avoided PE" to exist for the purposes of the legislation, or on profits diverted from the UK by way of intra-group transactions having inadequate economic substance; and Offshore Receipts in respect of Intangible Property rules (ORIP), imposing UK tax on the receipt of royalties by offshore companies deriving from business activity in the UK.

·      EU - ATAD: At EU level, the Anti Tax Avoidance Directive has been implemented in Gibraltar and Malta, including exit tax, General Anti-Abuse Rules and Controlled Foreign Corporation rules.

The likelihood of scrutiny of tax practices by tax authorities in relevant jurisdictions and the aggressiveness of tax authorities generally remains high. A finding of taxable presence of the Group in one or more jurisdictions, a transfer pricing adjustment with respect to attribution of profit to such jurisdiction(s), or imposition of another form of tax as mentioned above, may have a substantial impact on the amount of tax and VAT paid by 888.

888's effective tax burden also increases due to the imposition or increase of gaming duty in markets in which the Group has customers.

Relevance to strategy: In addition to the financial consequences of a challenge to 888's tax structure, tax compliance - and being seen to be paying the "right amount" of tax - has become a serious reputational issue as well as being a regulatory compliance issue. As such, it is crucial that 888 has a solid basis for its tax positions taken in relevant jurisdictions.

How the risk is managed: 888 aims to ensure that each legal entity within its Group is a tax resident of the jurisdiction in which it is incorporated and has no taxable presence in any other jurisdiction. In addition, 888 consults with tax advisers not only in jurisdictions in which its Group companies are incorporated and in which it has personnel, but also in major markets in which it has customers, in order to comply with its legal obligations whilst taking such action as is necessary to prevent the improper imposition of unlawful or double taxation.

What happened in 2021: 888 continues to engage with tax authorities and obtain legal advice in order to mitigate exposures.

The Group's Israel subsidiary finalised an Assessment Agreement with the Israeli Tax Authority which applies to tax years 2016-2020.

In January 2022, following approval by the Company's shareholders at its Extraordinary General Meeting, the tax residence of 888 Holdings plc was transferred to the UK by virtue of management & control. Whilst the Company expects that this should have no material adverse impact on the Group's effective tax rate or tax cash outflow for the foreseeable future, the Company will from such date be subject to tax and reporting obligations applicable to a UK resident company.

Retention of Key Personnel and Succession risk à Increased during 2021

The risk: The success of the Company is in part dependent on its ability to retain its key personnel, including at Board and senior management level and throughout the business, and to successfully manage succession planning in the case of key personnel leaving the Company.

Relevance to strategy: Human capital is important to online gaming businesses, and online businesses generally, and competition for highly-qualified personnel is intense in locations in which the Group is based. Ensuring orderly succession planning is important to delivering on the Company's strategy and avoiding undue disruption to the business.

How the risk is managed: Executive directors and senior management are compensated competitively, including an equity component and bonus partially deferred into shares. The Board has an active Nominations Committee, which is responsible for succession planning at the Board and senior management levels, and is supported as necessary by external executive recruitment agencies.

What happened in 2021: On 31 March 2021 Lord Mendelsohn took over from Brian Mattingley as Chair of the Board. Anne de Kerckhove was appointed as the Senior Independent Director and Zvika Zivlin stepped down as Non-Executive Director in May 2021. Anne de Kerckhove was appointed as the Senior Independent Director and Chair of the Remuneration Committee. Limor Ganot was appointed to the Audit and Remuneration Committees.

Business Disruption due to Pandemics such as COVID-19 è remained stable during 2021

The risk: As a multinational company based in a number of locations worldwide, the Company is dependent on the ability of its personnel to maintain their physical health and wellbeing, successfully carry out their roles from the Group's offices or remote locations, and at times to travel between sites. Business disruptions may occur when personnel are unable to work or communicate with one another, including due to pandemics such as COVID-19. Such outbreaks and the response thereto also affect the global economy, which can impact consumer confidence and spending more generally. There is currently evidence of an increase in customer activity in the Group's products, reflecting a general move in the broader economy from retail to online services. However, in the event of a prolonged global macro-economic downturn, consumer spending across the Group's online gaming product verticals may also become impacted.

Relevance to strategy: Online gaming businesses are dependent on their highly qualified personnel in order to operate effectively. Ensuring that personnel can work and communicate is key to delivering on the Company's strategy and avoiding undue disruption to the business. Our Sport business is also dependent on sporting events continuing to be held on which customers are interested in betting.

How the risk is managed: The Company monitors developments which may affect its sites and customers, and where necessary and practicable takes steps to mitigate disruption to the business.

What happened in 2021: In light of the ongoing COVID-19 pandemic and limitations imposed in various Group locations, including with respect to self-isolation as well as restrictions on travel and conferences, the Company has taken a number of mitigation steps including enabling remote working and rebalancing of responsibilities between sites. These actions enabled the Group to deliver its product development plan and to launch new products despite the restrictions.

Reputational risk è remained stable during 2021

The risk: The reputation of 888 is affected by the profile of both other online gaming and betting operators, as well as the gaming and betting industry as a whole. Various regulators, most notably the UKGC and the Swedish regulator, have adopted stricter compliance and enforcement policies, conducting more in-depth reviews of operational practices and sanctioning operators found to be non-compliant. There appears to be growing sentiment in various jurisdictions that existing regulations do not sufficiently protect minors and vulnerable players or do enough to prevent the use of illicitly obtained funds for gambling purposes. More specifically - due to the COVID-19 pandemic, which resulted in a growth in gambling spending and a potential increase in problem gambling prevalence, the industry as a whole has been the subject of increased criticism and the calls for stricter regulation, specifically around responsible gambling and advertising, have intensified. This could result in reputational damage to the Group, as well as in the adoption of stricter regulations and enhanced enforcement measures.

Relevance to strategy: Underage and gambling-related harm, as well as the use of illicit funds for gambling, are risks associated with any gaming business, and ensuring compliance with regulatory requirements for the protection of vulnerable people and the prevention of money laundering is critical to maintaining 888's online gaming licences. 888 also recognises that, in light of the COVID-19 outbreak, people are spending more time at home with potentially increased stress from economic uncertainty, meaning that 888's vigilance on safe gambling and preventing gambling-related harm is even more important than ever.

How the risk is managed: Staff are trained to provide a safer gaming experience to customers and to recognise and take appropriate actions if they identify compulsive or underage activity. 888 also complies with eCOGRA guidelines to protect customers. Web links to professional help agencies are provided on 888's real money gaming sites, and 888 has a dedicated website which provides information regarding responsible gaming. Players can also limit their play pattern or request to be self-excluded. 888 furthermore - directly or via industry bodies - seeks to ensure that legislators and regulators are provided with accurate and useful information regarding protections against problem and underage gaming. Special customer protections were added during the COVID-19 pandemic, in order to mitigate the increased risks arising from customers remaining at home for long periods under conditions of stress. These included compliance with regulations and guidance issued by various regulators, including the UKGC as well as the Spanish and Swedish regulators, as well as adopting social responsibility guidelines and increasing proactive responsible gaming communications and measures for our customers.

What happened in 2021: There have been growing calls for the adoption of stricter responsible gambling and player protection measures, as well as stricter advertising restrictions, in response to the COVID-19 pandemic. There has also been some public and press criticism against the industry due to some operators perceived to be taking advantage of the pandemic to drive business. 888 continued to devote significant resources to putting in place prevention measures coupled with strict internal procedures to protect customers, and monitor and update procedures to ensure that minors are unable to access their gaming sites. 888 continues to improve on efforts to detect and prevent instances of problem gambling, and continues to review and update its anti-money laundering and safer gambling policies to better detect players suspected of using illicit funds for gambling, and to better identify players showing indicators of harm or patterns of problem gambling. 888 has continued its review of all its websites and those of its B2B partners with a view to ensuring that content is responsible and compliant with the applicable advertising standards. 888 has also continued enhancing its integration with the National Online Self-Exclusion Scheme (also known as "GAMSTOP") to enable its customers to self-exclude on national level from all UK online gambling operators. 

Partnership risk è remained stable during 2021

The risk: B2B partnerships expose 888 to business risks as well as compliance and reputational risks, with increased pressure on 888 as the licence holder, particularly from the UKGC, to monitor activities of its B2B partners. 888 furthermore uses services provided by third parties, including in its Sport vertical during the transition to 888's new proprietary platform, game providers including live casino, payment service providers, KYC and age verification providers, which if disrupted due to general economic conditions or otherwise, may impact 888's operations.

Relevance to strategy: B2B constitutes a material part of 888's business, particularly for Bingo in the UK; in addition, its US B2B contracts have strategic importance for the longer term. Third party providers are an important part of maintaining 888's attractive product offering.

How the risk is managed: 888 acted to reduce its dependency on B2B relationships, by entering into a sales agreement for he group's entire B2C and B2B bingo businesses to Saphalata Holdings Ltd., a member of the Broadway Gaming group in December 2021. The transaction is still pensing obtaining the required regulatory consents and approvals. Remaining B2B contracts will be maintained commercially in terms of the functionality and technology of the B2B platform offered, competitive pricing, maintaining an ongoing relationship with B2B partners, and ensuring that 888 has a good understanding of the needs of its B2B partners and their owners.

What happened in 2021: In December 2021, 888 entered into an agreement to sell off the group's entire B2C and B2B bingo businesses to Saphalata Holdings Ltd. 888's US B2B partner Caesars acquired William Hill plc in April 2021, a move that could impact on the relationship with 888. The agreement with Caesars has been extended until 2026, removing the risk for the short and mid-term. In June 2021, 888 struck an exclusive partnership with the Authentic Brands Group, owner of the Sports Illustrated brand, to develop Sports Illustrated online sports betting and iGaming products in the United States. In September 2021, 888 entered into a transformational acquisition agreement with Caesars Entertainment, Inc. to acquire the international (non-US) business of William Hill. Certain of 888's service providers have been impacted by the COVID-19 outbreak and its economic consequences, and 888 is in the process of identifying these risks and mitigating where possible.

Acquisition risks è increased during 2021

The risk: 888 has made several acquisitions in the online gaming and betting space in previous years, and intends to continue being active in this area, with value enhancing M&A being a key pillar of its growth strategy. Acquisitions of gaming companies carry business risks, such as potentially overpaying for what are mainly intangible assets, as well as legal and regulatory risks, including the receipt of necessary regulatory approvals to the transaction and exposure to legacy non-compliance of the seller. Furthermore, integration of acquired entities gives rise to additional risks, including but not limited to, potential increased staff turnover, technological failures in respect of technology migration, increased financial burdens, and the requirement of management attention and operational resources.

Relevance to strategy: The online betting and gaming market has undergone significant consolidation in recent years, with the trend set to continue, driven by the benefits of scale when operating across multiple highly regulated jurisdictions. Value enhancing M&A is a key pillar of 888's strategic framework as it looks to build leading positions in the most attractive end markets.

How the risk is managed: 888's legal, financial and tax advisers ensure that a comprehensive due diligence is carried out on potential acquisition targets. Where possible 888 may look to acquire assets rather than shares of companies, in order to mitigate exposure to any past non-compliance issues on the part of the seller. 888 considers the resources required to integrate acquired entities as part of its overall evaluation of potential acquisitions, and thereafter in its annual budgeting and planning. 888 plans extensively for the operational and technical requirements related to any integration.

What happened in 2021: In September 2021, 888 announced the proposed acquisition of William Hill International, which would significantly transform the scale of the business. The proposed Acquisition would create a global online betting and gaming leader by bringing together two highly complementary businesses and combining two of the industry's leading brands, and significantly accelerates progress against 888's strategy. The acquisition is currently expected to complete in H1 of 2022.

Liquidity risk è remained stable during 2021

888 has currently no third-party debt. In addition, the Company's net cash position improved and business liquidity increased during 2021.

DIRECTORS' STATEMENT OF RESPONSIBILITIES

The directors confirm, to the best of their knowledge:

·      that the consolidated financial statements, prepared in accordance with international accounting standards in conformity with the requirements of the Gibraltar Companies Act 2014 and UK adopted IFRSs give a true and fair view of the assets, liabilities, financial position and profit of the parent company and undertakings included in the consolidation taken as a whole;

·      that the strategic report, includes a fair review of the development and performance of the business and the position of the Company and undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face; and

·      that they consider the annual report, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the company's position, performance, business model and strategy.

All of the current Directors have taken all the steps that they ought to have taken as Directors to make themselves aware of any information needed by the Company's auditors for the purposes of their audit, and to establish that the auditors are aware of that information.  The Directors are not aware of any relevant audit information of which the auditors are unaware.

On behalf of the Board:

Itai Pazner

Chief Executive Officer

8 March 2022

Consolidated Income Statement

For the year ended 31 December 2021

¹ Adjusted EBITDA is an Alternative Performance Measures ("APMs") which does not have an IFRS standardised meaning. The Group present Adjusted EBITDA since it is the main measure the analyst community uses to evaluate the Company and compare it to its peers. The Group presents adjusted measures because it allows for a further understanding of the underlying financial performance of the Group.

² The foreign exchange gains and losses associated with operating activities had historically been immaterial and as such was presented as a Finance expense. In 2021 management decided that the loss will be correctly reclassified to be included in other cost of sales within operating profit.

Consolidated Statement of Comprehensive Income

For the year ended 31 December 2021

The notes below form part of these consolidated financial statements.