Strong third quarter from Betsson AB

Betsson AB has turned in another strong performance for Q3-2018 and the year to end September, reporting revenue up 21 percent y-o-y, and EBIT rising 57 percent in the quarter, which ran from July to end September..

Third quarter highlights included:

* Group revenue up 21 percent at SEK 1,426.8 (1,180.6) million, with an organic growth of 16 percent;

* All regions showed growth in the quarter;

* Casino revenue grew by 22 percent to SEK 1,066.3 and Sportsbook revenue grew by 23 percent to SEK 338.9 million, with a sportsbook margin of 7.4 (7.1) percent;

* 1.8 percent of the Group revenue in the third quarter was related to the FIFA World Cup that ended on 15 July 2018;

* Active players were up 11 percent at 687,390;

* Operating income (EBIT) rose 57 percent to SEK 340.2 (216.0) million on “better economies of scale”;

* Operating margin was 23.8 (18.3) percent.

Year to end September numbers included:

* Group revenue up 15 percent at SEK 3,983.2 (3,460.0) million, with an organic growth of 11 percent;

* Operating income (EBIT) up 28 percent at SEK 852.3 (663.8) million;

* Net income up 30 percent at SEK 764.5 (587.6) million, corresponding to SEK 5.52 (4.25) per share;

* Operating cash flow of SEK 984.0 (667.7) million.

CEO Pontus Lindwall reported that the strongest growth was experienced in Western Europe and Nordics. He observed that improved earnings are a result of the scalability in Betsson’s business, showing that improved products and keeping focus on efficiencies results in higher earnings.

“The increased revenue is achieved by a combination of product improvements and more efficient marketing spend. In the third quarter, re-allocation of marketing investments between different markets, and also in the mix of traditional marketing and affiliate marketing, made it possible to efficiently grow revenue.

“Going forward, we expect marketing investments to increase as online gaming licences are introduced in Sweden. Betsson was one of the first to apply for online gaming licences in Sweden.”

Lindwall noted that subsidiary Corona Ltd has been fined Euro 300,000 by the Dutch gaming authorities (KSA), but has appealed tghe penalty because Betsson views the Netherlands as an important market long-term and has ambitions to channel Dutch customers into the licenced system when the market re-regulates.

“We continue to execute on the “back on track” plan which includes a number of product and technology improvements, additional efficiencies and focus on core markets. The fourth quarter has begun with daily revenues higher than the average daily revenue for the full fourth quarter last year,” the chief executive concluded.

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