Betsson Group has published its interim report for the second quarter of 2022, declaring ‘all-time high’ revenues thanks to the performance of its sportsbook and the growth witnessed in Latin America as well as Central and Eastern Europe and Central Asia (CEECA).
In Q2, Betsson reported group revenue of €186.3m ($189.5m), an 8% increase year-over-year from Q2 2021’s €172.8m ($175.8m), and organic growth of 13%.
Per vertical, casino revenue only grew by 1% YoY to $124.3m (2021: $122.7m), while sportsbook revenue improved by 22% to $62.7m (2021: $51.2m) with sportsbook margin after free bets coming in at 8.3% (2021: 8.5%).
Casino revenue represented 66% of the group’s total revenue (2021: 70%) while sportsbook revenue represented 33% (2021: 29%).
Mobile casino revenue for the quarter stood at $98.5m (2021: $90.2m) and accounted for 79% of total casino revenue (2021: 74%). Meanwhile, mobile sportsbook revenue came in at $49m (2021: $42.1m), representing 78% of total sportsbook revenue (2021: 82%).
Betsson noted that its sportsbook offering was strengthened in motorsports, table tennis, and esports, resulting in a significant increase in live events offered. For casino, a new native app was developed for Jalla Casino in Sweden, while its live casino offering in Italy was broadened.
The group’s active customers during the quarter increased by 21% to 1,246,719 (2021: 1,027,635).
Commenting on the results, Betsson AB President and CEO, Pontus Lindwall, claimed the “all-time high revenue” was driven by the group’s sportsbook performance and its growth in Latin America and the CEECA region.
“Betsson’s second quarter featured continued good growth with all-time high revenue and further investments to support our expansion,” Lindwall stated.
“The Group’s organic growth was 13 percent, mainly driven by Latin America and the CEECA region (Central and Eastern Europe and Central Asia), where we see long-term growth potential as these markets still have a low share of online gaming.
“The sportsbook business showed strong development in the quarter – gross turnover increased by 20% and the margin was 8.3% (2021: 8.5%) – leading to all-time high revenue. Some of the football World Cup qualifiers in June ended in particularly favorable outcomes for Betsson and contributed positively to the margin in the quarter.
“Casino gross turnover also reached a new quarterly all-time high, while revenue came in at the second-best level ever.”
In Latin America, Betsson achieved an all-time high revenue of $46.5m during the quarter, an 86.2% increase YoY (2021: $24.9m). The operator also reported a record in deposits for the region.
The group reported that most Latin American countries showed growth both compared to the previous quarter and the corresponding period last year. Levels of activity remained high, especially within the sportsbook segment thanks to some high-profile events such as World Cup qualifying games in football.
During the measuring period, Betsson entered into sponsoring partnerships with AC Milan for the Latin America region, as well as with CONMEBOL Copa America Femenina 2022.
In North America, Betsson noted that its B2B initiatives continue according to plan, and discussions are currently being held with several potential sportsbook customers. Its ownership in the technology platform provider Strive increased from 35% to 40% during Q2.
Commenting on the group’s market performance, Lindwall added: “Betsson’s strategy is based on diversified revenues from existing and new markets, and in June Betsson became majority owner of the local gaming operator Betbonanza in Nigeria.
“Since last year, the regulated market in Germany is marked by a low level of channelization, due to extensive restrictions, high taxes, and an unclear licensing process. During the quarter, a decision was taken to only apply for one online casino license in Germany.
“On the sports side, Betsson continues to offer betting on horses through the Racebets brand and has a sportsbook license which is currently not operated.”
Betsson’s EBITDA for Q2 stood at $39.98m, a decrease of 16% YoY (2021: $47.4m), while the EBITDA margin was 21.1% (2021: 27.0%). Operating income (EBIT) was $29.7m, a 23% drop YoY (2021: $38.5m), while the EBIT margin was 15.7% (2021: 21.9%).
Net income for the quarter came in at $29.1m (2021: $33.9m), corresponding to $0.21 per share (2021: $0.24). Operating cash flow stood at $38.5m (2021: $57.3m), while net debt came in at -$20.1m (2021: $14.6m).
Lindwall said: “The cost increase compared to last year was driven by the general expansion while the change in geographic mix, with a higher revenue share from Latin America and no revenue from the Netherlands, led to a lower realized margin.”
Looking ahead, Betsson is optimistic about the rest of 2022, but it is taking into account the macro and geopolitical factors that continue to affect how the world operates, as well as a possible recession.
The group’s activities for the rest of 2022 include market launches in Mexico and Ontario, as well as preparing for the upcoming World Cup near the end of the year.
Lindwall concluded with an assessment of the economic conditions, noting: “We see that macro and geopolitical factors continue to dominate the world around us, with great uncertainty and concerns around war, inflation, higher interest rates, and potentially a coming recession.
“Despite uncertain capital markets, we recently refinanced our bond until 2025, which gives us the financial flexibility to continue investing in both organic growth and selective acquisitions. We continuously monitor the macroeconomic trends but also note that historically Betsson’s business has been relatively unaffected by the general business cycle.
“The first weeks of July are off to a good start and despite the macro factors, we are rather optimistic as we look ahead to the rest of 2022, which has many planned activities for Betsson, including market launches in Mexico and Ontario, as well as the football World Cup during the seasonally strongest fourth quarter.”