Betsson Group Suffer 10% Decline in Revenues Q4 Results Show
The Betsson Group have blamed poor performance in the Swedish, Dutch and Norwegian markets for a sharp drop in revenues. The company’s Q4 results show combined revenues of £103m (SEK1,289.5m), a figure that represents a 10% year-on-year decline.
Betsson’s casino vertical was the hardest hit, revenues of £77m are 10% lower than last year’s results. The company’s sportsbook operations fared slightly better, revenues of £24.8m are 9% lower year-on-year. Margins from sports betting also fell, the current margin of 6.3% is 1.1% lower than last year.
Betsson’s reduced revenue, in the mainly Nordic countries, has impacted the operating income with the earnings before interest, taxes, depreciation, and amortisation (Ebitda) figure of £16m representing a drop of 41% YoY. The company’s EBIT margin fell from the 2018 figure of 23.8% to 15.5%, a fall of 8.3%.
Betsson CEO, Pontus Lindwall said that the company had hoped to see recovery in the Q4 figures due to the Swedish market but admit they had not “reached intended objectives”. He added that the expected consolidation of the market had not taken place, and the crowded nature meant that many operators are not showing any profitability. Lindwall also highlighted the 18% tax rate and said that declining channelisation “jeopardises consumer protection”.
The Nordic regions generated £35.9m (down 32% YoY), and the company’s Western Europe income also declined to £30.9m (down 15% YoY). There were better news for Betsson in the Central, Eastern European and Asian markets, revenue from these increased by 37% YoY and accounted for £29.5m during Q4.
Despite the largely disappointing financial results, Betsson is still investing in acquisitions. Last month, the company reached a share purchase agreement with Gaming Innovation Group (GiG) to buy their B2C assets for €31m.
Betsson will gain the Rizk, Guts, Kaboo and Thrills brands, and as part of the deal, a long-term partnership between the companies will exist. Betsson will pay €22.3m in cash and a platform licensing fee of €8.7m.
Betsson will use the Gaming Innovation Group platform for at least 30 months with the company paying a premium fee during the first two years. GiG will use the revenue gained from this arrangement to repay a SEK300m bond the company took out in 2019.
Betsson’s CEO said of the deal:
The agreement with GiG further strengthens and expands Betsson’s outreach and growth potential for its proprietary sportsbook and payments platforms in the B2B market.– Pontus Lindwall, Betsson CEO.
In other company news, Betsson’s B2B division has secured a major deal for the company.
Announced in January, Betsson signed a sports betting supplier deal with the Claymore Group, owners of egaming brand LeTou. The deal will see Betsson provide the platform and supply an odds-compilation service for Claymore for their sports betting brand ibet, set to launch in May.
Lindwall described the deal as a “milestone” for the company and added that it proves the company had a competitive sportsbook product. He added that the group’s strong technology platforms would enable further B2B possibilities.