Innehav - Betsson

Betsson AB (publ) interim report, 1 January-31 March 2018


The quarter: January – March

  • Group revenue was SEK 1,210.0 (1,102.0) million, an increase of 10 percent with an organic growth of 4 percent.
  • Casino revenue grew by 12 percent and Sportsbook revenue grew by 5 percent, with a sportsbook margin of 6.6 percent in the quarter.
  • Operating income (EBIT) was SEK 211.4 (240.9) million, a decline of 12 percent, mainly due to negative currency impact, negative contribution from recent acquisitions and increased marketing spend. The organic operating income (EBIT) was SEK 242 million.
  • Operational expenses in the quarter included a non-recurring restructuring cost of SEK 15 million.
  • The operating margin for the quarter was 17.5 (21.9) percent.

Key data:

SEK m Q1 2018  Q1 2017  ∆  Jan-Dec 2017 
Revenue 1 210,0 1 102,0 10% 4 716,5
Gross profit 864,3 806,3 7% 3 419,4
Operating income (EBIT) 211,4 240,9 -12% 882,2
EBIT margin 17,5% 21,9% 18,7%
Net income 187,9 214,4 -12% 786,5
Earnings per share (SEK) 1,36 1,55 -12% 5,68
Operating cash flow 312,2 204,9 55% 946,7
Casino revenue 922,8 822,9 12% 3 437,9
Sportsbook gross turnover 5 773,1 6 006,1 -4% 23 117,5
Sportsbook revenue 263,5 250,3 5% 1 140,3
Sportsbook margin after free bets 6,6% 6,1% 6,9%
Deposits 4 190,3 3 789,2 11% 16 308,0
Active customers 607 785 607 333 0%

Message from the CEO, Pontus Lindwall:

“Revenue for the first quarter 2018 was SEK 1,210.0 (1,102.0) million, an increase of 10 percent compared to the same quarter 2017. Organic growth was 4 percent for the quarter. The growth was mainly from casino, where we saw continued growth in Western Europe. Sportsbook in the Nordics grew by 22 percent, but the region Central and Eastern Europe & Central Asia (CEECA) declined mainly due to currency effects.

Operational income for the quarter was SEK 211.4 (240.9) million, a decline of 12 percent compared to the same quarter 2017. Increased marketing spend, currency effects and contribution from acquired companies had a negative impact on earnings. Marketing spend was focused on markets where we see growth opportunities, meaning that Betsson increased spend in Spain where recently launched sportsbook whilst marketing spend in the UK was pulled back. The operational expenses also include a non-recurring cost of SEK 15 million for the organisational restructuring implemented in the first quarter.

Continued efforts to improve operations
We follow a detailed plan and took several actions within different areas in the first quarter, aiming at getting Betsson back on track. The recent restructuring was made to increase efficiency in Betsson’s operations. We will continue to systematically implement further improvements. However, I want to repeat my message from last quarter that it will take time until we can see any material effects.

The Swedish government has presented a bill regarding re-regulation of the gambling market. A big concern with the bill is that Svenska Spel’s businesses are not clearly separated. Fair competition is the most important aspect in creating a successful gaming regulation where gaming is conducted within the licensed system.

The need for fair competition is also relevant for the Netherlands, where we are still waiting for a re-regulation. Many large European operators have targeted Dutch customers under EU licence and I hope that the Dutch authorities understands the importance of finding a realistic way to channelize these customers into the new regulation.

The second quarter has begun with revenues slightly lower than average daily revenue for the second quarter last year. The weaker start is due to a decline in an acquired company and a weaker than average sportsbook margin in the beginning of the quarter.”

Pontus Lindwall, President and CEO
+46 (0)8 506 403 00

Kaaren Hilsen, CFO
+46 (0)8 506 403 00,