Betsson H1 sees tough balance between new market growth and Euro declines

Betsson AB has underscored its ‘diversified corporate growth strategy’ – as progress within new markets offsets multiple headwinds across Western European jurisdictions.

Publishing its H1 2022 interim report, the Stockholm-listed online gambling group registered corporate revenues of €356m, up 8% on corresponding 2021 results of €330m.

Headline growth was attributed to a record Q2 performance that delivered an ‘all-time-high’ revenue result of €186m (Q2 2021: €172m) – as group performance benefitted from a record-breaking sportsbook turnover of €990m.

“Betsson’s second quarter featured continued good growth with all-time high revenue and further investments to support our expansion.” – explained Group CEO Pontus Lindwall.

“The sportsbook business showed a strong development in the quarter – gross turnover increased by 20 percent and the margin was 8.3% – leading to all-time high revenue. Some of the football World Cup qualifiers in June ended in particularly favourable outcomes for Betsson and contributed positively to the margin in the quarter.”

Further positives saw Betsson underline the strength and progress of its proprietary platforms and solutions, which catered for record active customers of 1.25m (+21%) and processed total H1 deposits of €1.6bn.

The strengthened KPIs reflected Betsson’s accelerated growth within previously underpenetrated Latin America and Central/Eastern European markets – regions in which Betsson registered respective ‘all-time-high’ quarterly revenue results of €46m and €61m.

Yet, despite recording all-time-high headline results and product KPIs, the combination of European restrictions and higher expansion costs saw Betsson register a 12% EBITDA decline to €73m (H12021: €82m).

Reporting on a successive quarter with no Dutch market revenues and further German market adjustments, Betsson saw its Western European revenues decrease by 39% to €25m.

Elsewhere, European drags were compounded as Nordic Q2 revenues declined by 6% to €51m – matched against record 2021 comparatives featuring UEFA Euro 2020 trading.

Lindwall commented on market developments: “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 channelisation, 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.”

The combination of European drags and new market expansion costs saw Betsson register a 19% decline in H1 operating income to €53m (H12021: €65m).

Interim operating expenses amounted to €173m (H12021: €153m) – with higher costs attributed to increased personnel expenses and the group registering higher betting duties in regulated markets.

Closing H1 accounts, Betsson declared a group net income of €49.5m, reflecting a 13% decline on 2021 profits of €57m.

Moving into the second-half of the year, Betsson stated that it would continue to invest in its product development to improve localised performance across all markets.

CEO Lindwall cited caution against developing macroeconomic factors:  “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.

“We continuously monitor the macroeconomic trends but also note that historically Betsson’s business has been relatively unaffected by the general business cycle.”

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