CEECA revenue growth of 75% drives Betsson’s most profitable quarter
Topline numbersBetsson reported Q1 2023 revenue of €221.9m amid a rise of 30%.
Casino revenue climbed by 37% year-on-year to €152m as sports betting revenue rose 19% to €67.2m on a sportsbook margin of 8%.
The CEECA (Central & Eastern Europe and Central Asia) was the geographical region that generated the most revenue for Betsson (€93.5m).
It also reported the highest rate of year-on-year growth at 75.1%.
Elsewhere, 26% growth in revenue from Betsson’s B2B segment caught the attention of analysts. B2B revenue reached €57.3m in the quarter, boosted by the previous acquisition of KickerTech.
Betsson’s revenue from locally regulated markets, where it pays local betting duties, rose 31% to €80.6m, representing 36.3% of total revenue.
EBITDA came in at €54.3m, up 62% on an EBITDA margin of 24.5%.
EBIT, or operating income, increased by 82% to €43m with an EBIT margin of 19.4%. This was an all-time high for the group.
The number of active customers declined by 11%, however, to 1,115,641, despite a 47% upturn in customer deposits.
“The year has started well for Betsson with continued profitable growth and strong cash flows,” said Betsson AB CEO Pontus Lindwall.
“We can look ahead to the rest of the year with a solid financial position that enables continued investments in sustainable growth and value creation for our shareholders,” he added.
The prospects for Betsson’s long-awaited return to the Netherlands look increasingly weak.
The operator has struggled to regain access to the market since it launched a licensing regime in 2021. An updated customer control database requirement is proving to be a sticking point.
Betsson applied for a licence in Q1 of last year but is still to receive accreditation.The market has changed dramatically in that time, and it now looks set to introduce a wide-ranging advertising ban from 1 July.
“That is of course problematic,” said Lindwall in an exclusive interview with iGaming NEXT.
“If you come to a market and you cannot use your customer database and you cannot do marketing, it is very hard to understand how you should approach that market.
“We don’t believe much in full covering marketing bans. It takes away a bit of the idea of being licensed, and you need to be licensed to be in the regulated market,” he added.
When asked whether Betsson had been tempted to withdraw the Dutch licence application, Lindwall confirmed they were still “in the process” and would monitor the market closely.
One analyst expressed concern over Betsson’s investment levels in Latam considering the market is already generating significant revenue for the group.
“We have invested up until now and we have created good revenues on those investments with pretty decent payback times,” said Lindwall.
“We will invest carefully but then again, it’s not a small country, there are many countries. It’s not a small market so it will take investment for us to keep on growing,” he added.
Betsson has failed to sign a B2B client in the US for its proprietary sportsbook solution despite launching the software in Colorado back in March 2022.
On this topic, Martin Arnell from DNB asked: “Are you still as certain about this [business] case as you were maybe one or two years ago?”
In response, Lindwall said Betsson was still in discussions with potential customers, although admitted it was hard to predict when a deal might finally make it over the line.
“Obviously, we would have been more happy if we already had one agreement or two but these things take time as they are big decisions,” he added.
Current trading and outlook
Average daily revenue in Q2 2023 up to 23 April was 26.1% higher than the average daily revenue of the full second quarter of 2022.
When adjusted for currency effects and acquisitions, the increase was closer to 35.4%, according to Betsson.