Flutter Entertainment outlook revised to stable at S&P on deleveraging delay
Investing.com -- S&P Global Ratings has revised its outlook on Flutter Entertainment to stable from positive while affirming the company’s ’BB+’ issuer credit rating.
The rating agency cited Flutter’s deviation from its expected deleveraging path due to higher-than-anticipated acquisition spending, which is projected to push the company’s adjusted debt to EBITDA ratio to approximately 4.5x in 2025.
On July 10, Flutter announced an agreement to acquire Boyd’s 5% equity stake in FanDuel for $1.755 billion, ahead of a 10-year deal option set to expire in July 2028. This acquisition values FanDuel at about $31 billion and increases Flutter’s ownership to 100%.
The deal is expected to secure more efficient market-access terms through 2038 in key U.S. states including Illinois, Indiana, Iowa, and Kansas, potentially delivering $70 million-$90 million in annual cost savings and a 50 basis point improvement in EBITDA margin.
This acquisition follows Flutter’s recent purchases of a 56% stake in Brazil-based NSX on May 14 and the completion of its Snaitech acquisition on April 30. These moves have transformed Flutter into a global gaming powerhouse, making it the market leader in Italy with approximately 30% of the online market and placing it among the top three operators in Brazil with an estimated 11-12% market share.
Flutter reported strong performance in 2024, with revenue growing 19.2% to $14 billion and adjusted EBITDA reaching $1.9 billion with a margin of about 13.8%. The company’s free operating cash flow more than doubled to over $1 billion.
In the first quarter of 2025, Flutter maintained solid performance with organic revenue up 8% year-on-year, supported by an 11% increase in average monthly players and strong U.S. performance where revenue rose 18%.
S&P expects Flutter’s adjusted leverage to increase to about 4.5x by year-end 2025 before declining to below 4.0x by 2026 as discretionary spending normalizes. The rating agency noted that while Flutter’s revised financial policy targets reported net leverage of 2.0x-2.5x, the lack of track record at these levels and the company’s flexibility for future M&A and shareholder distributions aligns with the current ’BB+’ rating.
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