Kindred Group Q3 revenue declines 7% despite Unibet’s “flying” return to the Netherlands

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Kindred Group has reported a 6.9% year-on-year decline in revenue to £277.8m for Q3 2022.

Despite the annual downturn, CEO Henrik Tjärnström is confident that a poor period of prolonged financial performance throughout 2022 is firmly in the rear-view mirror.

Kindred was able to welcome back Netherlands customers in Q3 after relaunching operations in the country following a nine-month absence.

Tjärnström said the firm’s Unibet brand had enjoyed a “flying start” on its return to the Netherlands, where active customers reached 137,000 since re-entry on 4 July 2022.

While the re-launch has outperformed Kindred’s expectations, the contribution from the Netherlands was still down on Q3 2021, a period that included the Euro 2020.

Kindred Group CEO Henrik Tjärnström on returning to the Netherlands: “Thanks to our strong brand awareness, unique product offerings and an excellent team, we are off to a flying start.”

As a result, group revenue excluding the Netherlands actually increased by 11% from the prior corresponding period, or by 8% when allowing for the exclusion of the acquired Relax Gaming business.

Underlying EBITDA decreased by 52% to £40.3m, down from £84.8m last year. The underlying EBITDA margin came in at 14.5%, which Kindred said proved good recovery on previous quarters and would help clear the path to normalisation in future quarters.

Profit before tax dipped by 16% to £60.3m. Active customers also declined by 16% in Q3, to 1.47 million, again due to lower levels in the Netherlands and the absence of a major football tournament. Active customers climbed by 10% on a sequential basis, however.

Kindred said that based on current momentum, it expects to achieve a 15% market share in the Netherlands in Q4 2022.

Regional review

Gross winnings revenue from Western Europe accounted for 56% of group total despite a year-on-year decline of 20% to £151.8m.

“France and the UK have both performed well against the prior year, as we saw Covid trading conditions start to normalise in the comparatives and additional consistent processes applied for affordability,” said the operator.

Indeed, in the UK, revenue rose by 10% compared to Q3 2021, while French revenue climbed by 24%. Belgium declined by 16%, however.

In the Nordics, revenue amounted to £78.3m, representing a 12% increase on last year, boosted by a 29% rise in Sweden driven by casino growth following the easing of Covid-19 restrictions on the vertical.

Revenue from Central, Eastern and Southern Europe (CES) rose by 7% to £27.5m, while ‘other regions’ – including the US – also climbed by 7% to £14.3m.

Providing a breakdown for the US business, Kindred revealed that North American revenue amounted to £7.8m, a decrease of 3% on a constant currency basis. The company made an EBITDA loss in the market of -£9.8m, driven by £7.2m of marketing costs.

Broken down by vertical, Q3 sports betting revenue declined by 6% to £108.9m as casino revenue dipped by 11% to £156.6m. Other verticals, including poker, dropped by 5% year-on-year to £13.5m.

“With the Christmas period coinciding with a Winter World Cup, we are expecting next quarter to be a strong performing quarter for the casino product,” said Kindred.

After the reporting period, Kindred said average daily revenue up to and including 23 October 2022, was £3.3m, 27% higher than the daily average for the full Q4 2021.

“Although we still do not see any tangible indicators of macro-economic pressure, the current geopolitical insecurity continues to create uncertainty across markets and industries, and we continue to closely monitor these developments,” said Tjärnström.

“We now look forward to a very exciting fourth quarter, with the Football World Cup taking place between 20 November and 18 December.

“The World Cup tournament is always a great opportunity for customer acquisition and reactivation, which normally means very high activity levels at the end of the tournament,” he added.

About the author

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Jake Evans

Jake Evans is an NCTJ-accredited journalist and editor who has covered the online gaming and sports betting industry since 2017. He is the managing editor of iGaming NEXT and has previously worked in both content and data for EGR, Stats Perform and Football Radar.

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