2. Agenda  Introduction  Highlights & Operating Segments  Financial Analysis  Investment Risks  Valuation  Conclusion

3.  Based on current share price of €29.55  Fairly valued  Realistic valuation assumptions Business Description Financial Analysis Investment Risks ValuationConclusion Hold Recommendation

4. Share Price Graph Business Description Financial Analysis Investment Risks ValuationConclusion

5. €m Market Capitalisation Business Description Financial Analysis Investment Risks ValuationConclusion

6. Highlights  Creative marketing strategy  Strong management team  Excellent growth opportunities Business Description Financial Analysis Investment Risks ValuationConclusion

7. Operating Segments  UK and Ireland Online  Australia  UK Retail  Irish Retail  Telephone Business Description Financial Analysis Investment Risks ValuationConclusion

8.  UK and Ireland Online  Australia  UK Retail  Irish Retail  Telephone Business Description Financial Analysis Investment Risks ValuationConclusion

9.  UK and Ireland Online  Australia  UK Retail  Irish Retail  Telephone Business Description Financial Analysis Investment Risks ValuationConclusion

10.  UK and Ireland Online  Australia  UK Retail  Irish Retail  Telephone Business Description Financial Analysis Investment Risks ValuationConclusion

11. Financial Analysis 1.Margin Analysis 2.Earnings Analysis 3.Cash Flow Analysis Business Description Financial Analysis Investment Risks ValuationConclusion

12. 1. Margin Analysis Business Description Financial Analysis Investment Risks ValuationConclusion

13. 2. Earnings Analysis EBIT €‘000 Business Description Financial Analysis Investment Risks ValuationConclusion

14. 3. Cash Flow Analysis €‘000 Business Description Financial Analysis Investment Risks ValuationConclusion

15. Investment Risks  Economic Environment  Competitive Environment  Inexperience in Australian market  Taxation and Regulation Business Description Financial Analysis Investment Risks ValuationConclusion

16. Valuation Discounted Cash Flow Bear: €25.17 – 13.8% downside Base: €31.27 – 6.8% upside Relative Valuation Bull: €34.71 – 18.5% upside Business Description Financial Analysis Investment Risks ValuationConclusion

17. Valuation - Base case Discounted Cash Flow Bear: €25.17 – 13.8% downside Base: €31.27 – 6.8% upside Bull: €34.71 – 18.5% upside Business Description Financial Analysis Investment Risks ValuationConclusion

18. Valuation - Bull case Business Description Financial Analysis Investment Risks ValuationConclusion Discounted Cash Flow Bear: €25.17 – 13.8% downside Base: €31.27 – 6.8% upside Bull: €34.71 – 18.5% upside

19. Valuation - Bear case Business Description Financial Analysis Investment Risks ValuationConclusion Discounted Cash Flow Bear: €25.17 – 13.8% downside Base: €31.27 – 6.8% upside Bull: €34.71 – 18.5% upside

20. Business Description Financial Analysis Investment Risks ValuationConclusion Relative Valuation

21. Conclusion  Growth opportunities  Successful management  Creative marketing strategy  Fairly priced HOLD Business Description Financial Analysis Investment Risks ValuationConclusion

22. Questions?

23. Valuation Tree Risk PremiumMarketing Strategy ProfitabilityAustralian Reg. Bodies EBIT Growth Base Case Valuation Risk Free RateLiquidity & Leverage Betfair-PriceSportsbetOnline EBIT (product) Bull ValuationTerminal Value Balance Sheet Strength vs Peers Betfair- Characteristics Sportsbet Deal Segmented Profits Bear Valuation Price Sensitivity Leverage 5yr Cash Balance Corporate Governance PMUUK Retail Market Share Beta Calculation Price Sensitivity Beta Glossary of Terms Non-executive Board Members PMU DealIrish Retail Market Share Glossary of Terms 2

24. Forecasted EBIT Growth €’000m

25. Segmented Profits

26. UK Retail – Market Share

27. Irish Retail – Market Share

28. Australian Regulatory Bodies ACT Racing and Gambling Commission Casino, Liquor and Gaming Control Authority The Queensland Office of Gaming Regulation The Racing and Gaming Authority Office of Racing, Gaming and Liquor Independent Gambling Authority Tasmanian Gaming Commission Victorian Commission for Gambling Regulation

29. Profitability

30. Valuation Summary

31. Beta Calculation Adjusted Beta1.00 Historical ISEQ0.38 Historical FTSE0.94 Davy1.12 Credit Suisse1.10 Thomson Datastream0.44  Pro-Cyclical stock, dependant on economic conditions  Recent turbulence in ISEQ

32. Target Price Sensitivity - Leverage Net Debt WeightingEquity WeightingWACCTarget Price (€) 0.001.008.12%31.27 0.050.958.08%31.37 0.100.908.04%31.46 0.150.858.00%31.56 0.200.807.95%31.66 0.250.757.91%31.76 0.300.707.87%31.86 0.350.657.82%31.96 0.400.607.79%32.06 *At current borrowing costs

33. Target Price Sensitivity - Beta BetaWACCTarget Price (€) 1.209.02%27.01 1.108.51%28.99 1.008.12%31.27 0.907.67%33.92 0.807.22%37.03 0.606.37%45.23 0.385.43%59.43

34.  Competitor Specifics: – Betting Exchange, online gaming & Financial Trading – On average significantly better odds then traditional bookmaker – Charges commission on winning bets (c.5%) – “Market Makers” keep the market for an event liquid. (same function as a stock market)

35.  Share price graph since Oct 2010 IPO  BetFair current Market cap c.€1.1bn  P/E Ratio 21.79 times

36. Online – EBIT by Product

37. Risk Free Rate  Current yield on 10 Year UK government bond  Most of peer group competitors domiciled in the UK  Using German Bond would add c. €2.50 to share price

38. Risk Premium  Market risk premium of 4.5%  A fair representation of the current appetite for Risk in the market  Appetite for risk has been increasing in recent years

39. Base Case Valuation - Assumptions  Paddy Power maintains a certain level of profitability in its UK and Ireland as macro conditions improve  Australia business continues to grow with the market  Online business will face diminishing growth rates and EBIT margins due to increased competition in the online segment

40. Bear Case Valuation - Assumptions  Based on a number of unlikely events occurring, which would negatively effect Paddy Power's business.  Worst case scenario for taxes in the UK and Ireland.  Further contraction of UK and Irish economies  Reduced online market share

41. Bull Case Valuation - Assumptions  Based on a number of events, that if they were to occur would positively impact Paddy Power.  Australia legalises in-running betting online.  Paddy Power's fortunes in Ireland and the UK improve as the economies of both markets turn around.  Paddy Power secures a similar deal to the one it secured in France with PMU.

42. Terminal Value - Stable Growth

43. Liquidity and Leverage Current Ratio Net Debt/EBITDA

44. Marketing strategy

45. 5 year Cash Balance €m

46. Balance Sheet Strength €m

47. Corporate Governance  Currently satisfy all requirements  Board members must have sufficient time to add value to the company  Potential COI with Pádraig Ó Ríordáin

48. Non-Executive Board Members Non-Executive DirectorShareholding (number of shares) Nigel Northridge6,000 Tom Grace0 Fintan Drury34,200 Stewart Kenny444,440 Jane Lighting0 Pádraig O’Ríordáin0 David Power4,228,690 Brody Sweeney5,500

49.  Australia's premier internet betting and entertainment website  Operating profit - €4.6m in 2009  Active customers – 92,820 in 2009  2009 – IAS takeover

50.  May 2009 – entry into the Australian market. 51% stake for €27.2m  December 2010 – announcement of buying the remaining 39% for €101m  EBITDA

51.  Largest betting organisation in Europe  80 years of operations  10,400 sales outlets  6.5m customers  €9.3m turnover in 2010

52.  13/11/2009 – announcement of a business 2 business deal  Paddy Power manages risk and pricing for PMU’s online sports betting business  Trading  Risk management  Event management

53. Glossary of Terms  Bookmaker - a company who is licensed to accept bets on the result of an event based on their provision of odds to the customer.  Odds - also referred to as the price. The returns a bookmaker offers for a selection to win.

54. Glossary of Terms  In running betting – placing a bet on an event after it has started  Fixed-odds betting - a form of wagering against odds offered by a bookmaker, an individual, or on a bet exchange.  Punter – the individual who puts on a bet