Strategy and Vision

• - Overview
• - Growing the Profitability of the UK Retail Business
• - Strengthen Number One UK Online Position and Capture Growth Available Overseas
• - Improve the Profitability of our European Operations

Overview

Ladbrokes' essential strategy is to create long-term value through the provision of quality products and services that will enable management to drive revenues across our Retail, Telephone and eGaming portfolios, control costs and capitalise on the Company's key strengths.

Ladbrokes is:

• A long-established, trusted and widely recognised brand
• A market leader in UK retail betting with a Blue Chip estate of betting shops
• The retail betting market leader in Ireland and Belgium
• A market leading online operator via Ladbrokes.com

Ladbrokes has:

• A history of innovation and profitable adaptation to regulatory, fiscal and technological change
• An effective risk management system and more than 100 years of bookmaking expertise
• A strong management team with a wealth of experience in the betting and gaming industries

Our core goals are to:

• Steadily grow the profitability of the foundation UK retail business
• Build upon the No. 1 UK online position and capture growth opportunities available overseas
• Improve the profitability of Ladbrokes' European operations

Top

Growing the Profitability of the UK Retail Business

Ladbrokes' retail estate brings together one of the world's best known betting brands, leading-edge technology, expert customer service delivered by professional employees and prime high street locations.

We aim to grow net revenues through ongoing product evolution, enhanced customer relationship management (CRM) and the constant improvement of the competitiveness of our machine offer.

Key to enhanced CRM is the industry first OddsOn! initiative, which facilitates specific marketing programmes focused on key customer groups in the retail division. We are also trialling the use of OddsOn! with regard to machines and using the facility to promote the Company's various services including eGaming.

The improvement in the machine offer will be a key driver of revenues in 2010. During 2009 Ladbrokes began trialling content and machines from Global Draw and Inspired Gaming to ensure customers are offered the best technological products available in the market.

Against the current economic background, Ladbrokes' management has consistently emphasised the need to not only drive revenues but also reduce costs. Various efficiencies, including benefits from the computerised staff scheduling system, resulted in a one per cent reduction in UK retail costs for the year to 31 December 2009 compared with 2008. In addition, a £12 million annualised saving has been secured with effect from Q4 2010 through the buyout of Sunday/Bank holiday premium pay.

During 2010 Ladbrokes plans to open 50 new shops using a sophisticated method of site identification, incorporating census, sociodemographic and OddsOn! data.

Top

Strengthen Number One UK Online Position and Capture Growth Available Overseas

Ladbrokes.com has achieved strong organic growth since 2000 and has emerged as one of the largest websites in the UK. A 20.8 per cent upsurge in the number of active players in 2008 was followed by further player growth of 5.6% in 2009. The advent of the 2010 World Cup will add significant momentum to online betting activity and will provide a major opportunity for further recruitment against the background of the Company's enhanced Sportsbook

Core to Ladbrokes' plans to build on its No. 1 UK online position and capture growth opportunities overseas will be the enhancement of customer experience, maximisation of brand awareness, focused multi-channel offerings and the development of new territories.

January 2010 heralded the launch of the new generation Sportsbook which encompasses an enhanced product range, video streamed sports action, key statistics and improved functionality. The introduction of financial spread betting later this year will add yet another dimension.

In order to further capitalise on the most widely recognised betting brand in the UK, Ladbrokes is extending its marketing campaigns to new audiences by utilising Internet- and mobile-based social media outlets.

Several European countries are currently examining the regulation of online betting and gaming: a development that offers potential growth opportunities. Ladbrokes' strategy is to adopt a targeted approach to those countries that are legalising online betting and/or gaming. Prospective entry strategies will depend on market circumstances but include entrance under the Ladbrokes brand, partnerships or consolidation.

Top

Improve the Profitability of our European Operations

Revenue growth in Ireland will be driven through enhancement of the product range and targeted marketing campaigns via OddsOn! In Spain, Sportium, Ladbrokes' joint venture with Cirsa, will build on its market leadership through further expansion of its retail operations. Regulatory change is anticipated in other regions during 2010 which will provide an opportunity to enhance the scale of the Spanish business based on the Madrid model. The focus in Italy, where the retail estate is scheduled for divestment, will revert to the Italian-based Internet site: www.ladbrokes.it

Ladbrokes' international operations will continue to employ tight cost controls for the benefit of the overall retail estate.
Ladbrokes currently operates some 207 shops in the Republic of Ireland, where the Department of Justice is undertaking a review of betting and gaming regulation, and also operates 78 shops in Northern Ireland. Ladbrokes' retail estate in Belgium comprises 298 shops.

Top