Betsson: Q4 and Year-end report 2017
The quarter: 1 October – 31 December 2017:
- Group revenue was SEK 1,256.4 (1,118.5) million, an increase of 12 percent, with 10 percent organic growth.
- Sportsbook revenues grew by 36 percent due to a high sportsbook margin of 8.2 percent. Organic growth in Sportsbook turnover was 7 percent.
- Operating income (EBIT) was SEK 218.4 (265.1) million, a decline of 18 percent, mainly due to negative currency impact, negative contribution from recent acquisitions and increased marketing.
- The operating margin for the quarter was 17.4 (23.7) percent.
- After the quarter: Company has implemented efficiency measures that will reduce net costs with SEK 50-60 million annually. Restructuring costs of approx. SEK 15 million will be taken in Q1 2018.
The period: full year 2017:
- Group revenue increased by 15 percent to SEK 4,716.5 (4,117.3) million, with 9 percent organic growth.
- Operating income (EBIT) was SEK 882.2 (946.4) million.
- Net profit was SEK 786.5 (878.0) million, corresponding to SEK 5.68 (6.34) per share.
- Operating cash flow amounted to SEK 946.7 (1,168.5) million.
- The Board of Directors proposes to the AGM that SEK 393.1 (658.9) million, which corresponds to SEK 2.84 (4.76) per share, is distributed to shareholders. This is according to the new dividend policy, as communicated in March 2017.
|SEK m||Q4 2017||Q4 2016||∆||Jan-Dec 2017||Jan-Dec 2016||∆|
|Revenue||1 256,4||1 118,5||12%||4 716,5||4 117,3||15%|
|Gross profit||903,0||830,6||9%||3 419,4||3 078,0||11%|
|Operating income (EBIT)||218,4||265,1||-18%||882,2||946,4||-7%|
|Earnings per share (SEK)||1,44||1,76||-18%||5,68||6,34||-10%|
|Operating cash flow||278,9||332,2||-16%||946,7||1 168,5||-19%|
|Casino revenue||867,3||823,7||5%||3 437,9||2 907,8||18%|
|Sportsbook gross turnover||5 965,4||6 117,7||-2%||23 117,5||24 392,1||-5%|
|Sportsbook revenue||359,3||264,4||36%||1 140,3||1 080,4||6%|
|Sportsbook margin after free bets||8,2%||6,6%||6,9%||6,5%|
|Deposits||4 362,4||3 947,1||11%||16 308,0||14 457,6||13%|
|Active customers||615 499||573 277||7%|
Message from the CEO, Pontus Lindwall:
“Revenue for the fourth quarter was SEK 1,256.4 (1,118.5) million, an increase by 12 percent compared to the same quarter 2016. The growth was driven by sportsbook, where we saw a high margin of 8.2 percent and growth in gross turnover excluding currency effects. The growth indicates that Betsson’s new mobile web sportsbook, which was launched on core brands during the quarter, has been well received by customers so far. Casino revenue growth was strong in region Western Europe, but the region Nordics showed a decline in Casino due to strong competition.
Operational income for the quarter was SEK 218.4 (265.1) million, a decline by 18 percent compared to the same quarter 2016. Increased marketing spend, currency effects and negative contribution from acquired companies had a negative impact on earnings.
Actions to improve business
We have identified and started to implement a number of improvements on both the product and the marketing side. The launch of the new front-end system for Casino and Sportsbook on desktop and apps should be completed during 2018. Betsson will focus marketing spend on key markets with the ambition to achieve a higher return on investment. As an example, we have scaled back on marketing volumes for the UK.
During the first quarter 2018, Betsson restructured the operations. The new flatter organisation will enable the Company to work more efficiently.
In order to ensure that the operational companies owned by Betsson AB lead the way within responsible gaming, Betsson AB ordered an independent review in December 2017. The report recognised that responsible gaming is taken seriously at Betsson and also offers players a wide selection of responsible gaming tools, but it also pointed out some potential enhancements to improve work further within this area. Actions are in place and the results will be followed up closely by Betsson AB management and the Board of Directors, and also by reporting KPI’s in the interim reports going forward.
When I stepped in as CEO in September, my first action was to analyse the situation the company was in and together with management set a plan on how to bring Betsson back to higher growth and earnings. It will take some time until I am satisfied, but we are systematically implementing actions to improve performance and expect to see results towards the end of the year.”
Pontus Lindwall, President and CEO +46 (0)8 506 403 00
Kaaren Hilsen, CFO +46 (0)8 506 403 00, email@example.com
Pia Rosin, VP Corporate Communications +46 (0)736 00 85 00, firstname.lastname@example.org